Last year I wrote an article in our company’s biannual newsletter detailing what I thought was necessary for our industry, natural gas, to recover from the plunge in it’s the price. In it I said “…relying on input demand for the production of inelastic goods (stuff we buy largely regardless of price i.e. food & energy) to return the industry to sunnier times is akin to expecting rip-roaring profit growth in the grocery industry to fuel robust growth in GDP.” Now it seems some prominent people are indirectly trying to make that case about GDP growth.
After an extension of unemployment benefits ran into some stiff headwinds last week, House Speaker Nancy Pelosi reminded us that they “inject demand into the economy.” She went further and informed us of a new advantage: it “creates jobs faster than almost any other initiative you can name.” Huh? It’s debatable whether or not unemployment benefits are even a job preserver, much less a job creator.
It is technically true that they do support demand, but demand for what? Given that benefits average a little more than 1/3 of the average weekly wage nationally, demand is most likely relegated to the most essential, necessary goods, such as groceries, probably the most indispensable goods we buy.
Even in the absence of such assistance, don’t most people, especially parents, find a way to provide for such necessities, be it drawing on savings, taking whatever work can be found, seeking private charity (family or church) or even selling assets? If someone can’t find a job after 26 weeks, the range of time when most benefits originate from taxes on businesses, it’s probably time to evaluate his/her/their current living expenses i.e. rent/mortgage, TV, phones, etc.
Regardless of the source of funds, we will always eat and clean ourselves. Therefore, the purchase of groceries rarely fluctuates. It is true that when a society becomes richer the makeup of its diet changes, incorporating more meat for example, an entrée that is a luxury in many parts of the world. We also might buy more brand-name foods. This might explain why we spent 17% more on groceries in 2007, the last year of solid economic growth before the recession, than last year.
Still, in those beefier, even steak-ier, Charmin-using times, groceries accounted for less than 10% of GDP. In 2009, that figure was 5 ½ %. Last year’s figures arguably represent the minimum amount of basic food we need to get by. This is why we are unlikely to ever see a headline that reads “Grocery Stores’ Profit Lead the Way in 3rd Quarter GDP Surge”.
Whatever jobs that may have been shed at Del Monte that were not subsequently absorbed by generic fruit & vegetable canners are unlikely to return due to an extension of unemployment insurance.
Tuesday, July 06, 2010
Saturday, June 12, 2010
Before You Take Advantage of a 0% Credit Card Offer ...
I have become more and more averse to debt as I have grown older and educated myself more. But I'm still open to it if we can come out ahead. With that in mind, this article from the Wall Street Journal this morning (http://online.wsj.com/article/SB10001424052748703890904575297353083622856.html?mod=WSJ_PersonalFinance_PF2) caught my interest.
The notion of borrowing from a 0% credit card and dumping the proceeds in an interest-bearing account is a good one. A few years ago, we actually started using such offers to move around our old student loan balance. Going the savings route, with $10K, could net you almost $180 in interest after a year (assuming that a portion of that $10K is used to make a $200 monthly payment to that credit card). There's only one hitch: the transaction fee.
Every time we move the balance from one credit card to another, there is a 2-3% transaction fee. So for the aforementioned $10K, we'd have to pay $200-300. Unless part of the lure of recent offers is the absence of such a fee, simple math shows that to be an unwise 'investment'.
The notion of borrowing from a 0% credit card and dumping the proceeds in an interest-bearing account is a good one. A few years ago, we actually started using such offers to move around our old student loan balance. Going the savings route, with $10K, could net you almost $180 in interest after a year (assuming that a portion of that $10K is used to make a $200 monthly payment to that credit card). There's only one hitch: the transaction fee.
Every time we move the balance from one credit card to another, there is a 2-3% transaction fee. So for the aforementioned $10K, we'd have to pay $200-300. Unless part of the lure of recent offers is the absence of such a fee, simple math shows that to be an unwise 'investment'.
Wednesday, November 19, 2008
The Ultimate Hope
Well, it’s been two weeks since the election. In that time, even though I voted for McCain, I have felt some enthusiasm with anticipation of a fresh start. To honest, I’m ready to be finished with the Bush years. But I just can’t bring myself to get excited about Obama. A few reasons keep a lid on it.
There was an episode of South Park where Cartman’s mom was lobbying, in her own special way, different public officials to legalize abortion all the way up to the (divide Cartman’s age by ¾)th trimester. It was a funny bit because the notion was outrageous. It might still have been at least a little funny if she’d have instead said 4th trimester. Why? Because in either case, the baby is already born and there’s no way imaginable someone could lobby for that, or even close to that. This presidential campaign proved that isn’t so far fetched when we learned of President-elect Obama’s opposition to a Born Alive Infants bill, which directed medical attention to babies who survived botched abortions (wouldn’t the 4th trimester theoretically start at birth?). When he says he doesn’t want his daughters “punished with a baby”, he really means it!
Even though he acknowledged in a debate that raising capital gains rates has proven, in the past, to bring about decreased federal tax receipts, he still wants to raise it in the name of “fairness”. Two things come to mind. One is the saying “Holding back the strong is no way to help the weak”, never mind that it’s a debatable point if the weak became so as a result of their own actions. It is this kind of stance that has convinced me that liberals sincerely do believe in equality of outcome, if they’re not downright hostile to those who succeed (especially without government help). How else to explain them depriving beloved government programs/ideas of funds when they know they’ll get more if they cut taxes on higher earners?? Second, if he means fairness is lacking because tax rates on income derived from labor are higher than those on income derived from investments (capital gains, dividend, rents, etc.), OK, but he’s only half way there. Why not bring down those top marginal rates in an effort to have them eventually meet capital gains, and dividend rates, somewhere in the middle?
If he has his way, and there’s little reason to doubt he will given expanded democratic majorities in congress, there will be fewer people pulling the American economic wagon and yet more riding. This was one of the areas I wish the McCain campaign would have hit earlier, harder and more frequently: if upwards of 40% of Americans pay no net taxes, how can Obama possibly cut taxes for 95% of us? Now there’s some fuzzy math! How is that anything other than more people going on the dole?? One could argue that there are already too many people who pay no taxes. If, however, they would like to trade their right to vote while they owe no taxes, fine by me. Otherwise, it could conceivably be viewed that they vote for a ‘pay raise’ every time they vote democrat, kinda like how they can count on increases in the minimum wage (why stop at $7.25?) or strengthening organized labor (nothing like getting paid 90% of your salary when there’s no work to do).
There are other things, like his declaration that we have to get “past the notion that we are better than everyone else”, even though many Americans, like myself, think we are indeed exceptional. I do hold out some hope that he will all-of-a-sudden value life more, that he will turn away from professed desire to “spread the wealth around”, that he will realize the markets are gyrating right now because they don’t know what Washington is going to do next and that he shouldn’t contribute to that uncertainty with “experimentation”. I do hold out hope, a sliver, that he will do a 180. But that’s hoping for a lot.
There was an episode of South Park where Cartman’s mom was lobbying, in her own special way, different public officials to legalize abortion all the way up to the (divide Cartman’s age by ¾)th trimester. It was a funny bit because the notion was outrageous. It might still have been at least a little funny if she’d have instead said 4th trimester. Why? Because in either case, the baby is already born and there’s no way imaginable someone could lobby for that, or even close to that. This presidential campaign proved that isn’t so far fetched when we learned of President-elect Obama’s opposition to a Born Alive Infants bill, which directed medical attention to babies who survived botched abortions (wouldn’t the 4th trimester theoretically start at birth?). When he says he doesn’t want his daughters “punished with a baby”, he really means it!
Even though he acknowledged in a debate that raising capital gains rates has proven, in the past, to bring about decreased federal tax receipts, he still wants to raise it in the name of “fairness”. Two things come to mind. One is the saying “Holding back the strong is no way to help the weak”, never mind that it’s a debatable point if the weak became so as a result of their own actions. It is this kind of stance that has convinced me that liberals sincerely do believe in equality of outcome, if they’re not downright hostile to those who succeed (especially without government help). How else to explain them depriving beloved government programs/ideas of funds when they know they’ll get more if they cut taxes on higher earners?? Second, if he means fairness is lacking because tax rates on income derived from labor are higher than those on income derived from investments (capital gains, dividend, rents, etc.), OK, but he’s only half way there. Why not bring down those top marginal rates in an effort to have them eventually meet capital gains, and dividend rates, somewhere in the middle?
If he has his way, and there’s little reason to doubt he will given expanded democratic majorities in congress, there will be fewer people pulling the American economic wagon and yet more riding. This was one of the areas I wish the McCain campaign would have hit earlier, harder and more frequently: if upwards of 40% of Americans pay no net taxes, how can Obama possibly cut taxes for 95% of us? Now there’s some fuzzy math! How is that anything other than more people going on the dole?? One could argue that there are already too many people who pay no taxes. If, however, they would like to trade their right to vote while they owe no taxes, fine by me. Otherwise, it could conceivably be viewed that they vote for a ‘pay raise’ every time they vote democrat, kinda like how they can count on increases in the minimum wage (why stop at $7.25?) or strengthening organized labor (nothing like getting paid 90% of your salary when there’s no work to do).
There are other things, like his declaration that we have to get “past the notion that we are better than everyone else”, even though many Americans, like myself, think we are indeed exceptional. I do hold out some hope that he will all-of-a-sudden value life more, that he will turn away from professed desire to “spread the wealth around”, that he will realize the markets are gyrating right now because they don’t know what Washington is going to do next and that he shouldn’t contribute to that uncertainty with “experimentation”. I do hold out hope, a sliver, that he will do a 180. But that’s hoping for a lot.
Thursday, August 21, 2008
How Much Less Can I Get Away With?
I had an immediate opinion about this piece (http://www.mysanantonio.com/moms/Caregivers_watch_little_ones_in_wee_hours_so_parents_can_sleep.html) as soon as I read it. But, since I'm only a dad (of 3 pre-K girls), regardless that I also get up in the middle of the night, handle most bath times, share in bedtime stories, change diapers, etc. etc., I figured I would send it to my wife and see what she thought. She and I agree the vast majority of the time, so I thought it would be safe, and smart, to defer to her on this idea of nighttime nannies.
That evening I asked her if she read the article and what she thought. She said "Sounds like more outsourcing of parental duties." "That's EXACTLY what I was thinking!!" I love her.
How much more parental responsibility, one might say 'the parental experience', are we going to delegate to others? Putting babies/children in daycare because you have to go out to earn a living to make (reasonable) ends meet is one thing. But passing off the responsibility of soothing your baby in the middle of the night? Isn't that where part of the parental-child bond is formed?? No pain, no pain, right? But if that is your mantra, perhaps the parenting gig isn't for you.
I suppose soon some of these nannies will also offer breastfeeding as part of an a la carte menu.
That evening I asked her if she read the article and what she thought. She said "Sounds like more outsourcing of parental duties." "That's EXACTLY what I was thinking!!" I love her.
How much more parental responsibility, one might say 'the parental experience', are we going to delegate to others? Putting babies/children in daycare because you have to go out to earn a living to make (reasonable) ends meet is one thing. But passing off the responsibility of soothing your baby in the middle of the night? Isn't that where part of the parental-child bond is formed?? No pain, no pain, right? But if that is your mantra, perhaps the parenting gig isn't for you.
I suppose soon some of these nannies will also offer breastfeeding as part of an a la carte menu.
Sunday, August 03, 2008
Why Health Insurance is Expensive and Continues to Go Higher
"Verizon Communications Inc. was facing a weekend labor strike deadline as it negotiated Friday with unions representing about 65,000 employees.
"The workers object to the company's plans to require employees to contributed toward health-care coverage costs.
"Verizon currently picks up the entire cost of insurance premiums for C.W.A. (Communications Workers of America) and I.B.E.W. (International Brotherhood of Electrical Workers) workers."
When something is inexpensive, or outright free, whether through normal market mechanisms or artificially so (such as as in this example), more is demanded of it. When demand increases accordingly, the price goes up in an attempt to reach a market-clearing price. Yet, in cases such as this, the final consumers never feel the pinch of increased prices. So what happens? Their demand continues unabated, and prices continue to rise and the cycle continues.
Read that passage again. Verizon's unionized workers, which fortunately make up a small portion of their entire workforce, pay nothing. Zero, and they want to keep it that way. Do they have no pride, no shame or integrity?? Do you know anyone who has ever bragged about being a freeloader?? They are coddled like babies and now they're crying because their free goodies might be taken away. Welcome to the real world where we pay for essential goods and services!
On a side note, it's interesting that neither Yahoo nor AP, just to name a couple, pointed out the specifics of the health insurance point of contention. This passage was taken from Saturday's Wall Street Journal.
"The workers object to the company's plans to require employees to contributed toward health-care coverage costs.
"Verizon currently picks up the entire cost of insurance premiums for C.W.A. (Communications Workers of America) and I.B.E.W. (International Brotherhood of Electrical Workers) workers."
When something is inexpensive, or outright free, whether through normal market mechanisms or artificially so (such as as in this example), more is demanded of it. When demand increases accordingly, the price goes up in an attempt to reach a market-clearing price. Yet, in cases such as this, the final consumers never feel the pinch of increased prices. So what happens? Their demand continues unabated, and prices continue to rise and the cycle continues.
Read that passage again. Verizon's unionized workers, which fortunately make up a small portion of their entire workforce, pay nothing. Zero, and they want to keep it that way. Do they have no pride, no shame or integrity?? Do you know anyone who has ever bragged about being a freeloader?? They are coddled like babies and now they're crying because their free goodies might be taken away. Welcome to the real world where we pay for essential goods and services!
On a side note, it's interesting that neither Yahoo nor AP, just to name a couple, pointed out the specifics of the health insurance point of contention. This passage was taken from Saturday's Wall Street Journal.
Tuesday, June 17, 2008
Take This to the Ballot Box
"Offshoring does create losers, most obviously those whose jobs disappear when business operations are shunted abroad. But on balance it is good for the economy, making domestic firms more productive and generating jobs at home as well as abroad. Just as trade delivers overall gains to developed economies by allowing them to specialise in activities in which they have a comparative advantage, so does offshoring."
http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=11506740&subjectID=423172&fsrc=nwl
http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=11506740&subjectID=423172&fsrc=nwl
Sunday, May 25, 2008
The Dead Horse That Apparently Still Needs Beating
The “oil economy” may be in a state of flux, perhaps even a bit volatile, but I’d hardly say the collapse thereof is imminent.
The one thing that contributes largely to this volatility seems to be the one thing Robert Rivard of the San Antonio Express-News suggest employing to help us in his piece this morning ("A new energy economy in S.A. could be the next big thing": http://www.mysanantonio.com/columnists/stories/MYSA.052508.METRO3BRivard.2f26c04.html): more government. It is a good thing that gas prices are spurring the search for other forms of energy, but it is artificially inflated due to too much government involvement in the market via excessively low interest rates, restrictions on domestic production and refining, etc. Hopefully, the new finds in Brazil won’t head off at the pass sources that have become more viable due to high prices, such as the tar sands in California. Those are two examples right there that, if government would just get out of the way, new supplies would start flowing into the market and perhaps stabilize, if not bring prices down eventually.
Another example is his suggestion of offering Toyota incentives to switch the local plant from producing Tundras to hybrids. They simply need no such incentive. It’s like throwing gas onto a fire. They’re sales have taken a dip, as have truck sales in general. That’s all the incentive they need!
There will be clients for such alternatives when they become economically viable. Nothing would make me happier than to spend less on gas. But instead of looking at Priuses, I’m looking at scooters. It’s just not worth it to my family right now to spend a few thousand on a hybrid when my Camry does OK. We know two people who have Priuses, and we applaud them. They are the types of people who brought down the prices of flat screens. They wanted the product, regardless of price, and as more people bought them, the prices came down.
Surely, though, he doesn't believe in a free lunch. There’s no such thing as free bus ridership. The buses will not be maintained, tanks be filled, drivers be paid with money that comes out of thin air. The funds will come from somewhere, and that somewhere will be increased taxes, likely paid by people who still will not ride public transit.
Here’s hoping his “mandatory recycling program” only includes a recycling can for every trash can. The last thing I, or any freedom-loving American needs is to be forced to do something I may (which I am), or may not already be doing.
The one thing that contributes largely to this volatility seems to be the one thing Robert Rivard of the San Antonio Express-News suggest employing to help us in his piece this morning ("A new energy economy in S.A. could be the next big thing": http://www.mysanantonio.com/columnists/stories/MYSA.052508.METRO3BRivard.2f26c04.html): more government. It is a good thing that gas prices are spurring the search for other forms of energy, but it is artificially inflated due to too much government involvement in the market via excessively low interest rates, restrictions on domestic production and refining, etc. Hopefully, the new finds in Brazil won’t head off at the pass sources that have become more viable due to high prices, such as the tar sands in California. Those are two examples right there that, if government would just get out of the way, new supplies would start flowing into the market and perhaps stabilize, if not bring prices down eventually.
Another example is his suggestion of offering Toyota incentives to switch the local plant from producing Tundras to hybrids. They simply need no such incentive. It’s like throwing gas onto a fire. They’re sales have taken a dip, as have truck sales in general. That’s all the incentive they need!
There will be clients for such alternatives when they become economically viable. Nothing would make me happier than to spend less on gas. But instead of looking at Priuses, I’m looking at scooters. It’s just not worth it to my family right now to spend a few thousand on a hybrid when my Camry does OK. We know two people who have Priuses, and we applaud them. They are the types of people who brought down the prices of flat screens. They wanted the product, regardless of price, and as more people bought them, the prices came down.
Surely, though, he doesn't believe in a free lunch. There’s no such thing as free bus ridership. The buses will not be maintained, tanks be filled, drivers be paid with money that comes out of thin air. The funds will come from somewhere, and that somewhere will be increased taxes, likely paid by people who still will not ride public transit.
Here’s hoping his “mandatory recycling program” only includes a recycling can for every trash can. The last thing I, or any freedom-loving American needs is to be forced to do something I may (which I am), or may not already be doing.
Thursday, January 31, 2008
It Had to Come Down to These Two??
It’s been a depressing couple of political days lately…week and a half, actually. I’ve always been realistic about how unrealistic the chances are of my 1st choice, Dr. Paul, ascending to the presidency. But now, after the unremarkable campaign of Fred Thompson has ended, Rudy Giuiliani’s Florida/Super Tuesday strategy has gone down in flames and Mike Huckabee has predictably proven to be a 1-hit wonder, I might be left to choose between my two least favorites: John McCain and Mitt Romney. Yuck!
McCain is, as he likes to proclaim, a “straight-shooter”. Problem is, many of his shots are in the wrong direction i.e. man-mad global warming, the evilness of the pharmaceutical industry, campaign-finance reform, etc. (I do believe he has sincerely seen the problem with the immigration bill he tried to ram through last summer) He voted against the tax cuts and has said nothing more than he sign major tax reform if it “hit his desk”. That’s code for “It ain’t my issue and I’m not gonna push it.” And, although both Reagan and W proved you can never be sure, given his aforementioned errant ways, I’m not sure he’d nominate the right people to the federal bench. The only two areas in which I’ve been a big fan of his are national security/foreign policy hawkishness and his stance against federal spending. And if it wasn’t for the fact that Jack Kemp, Phil Gramm and Tom Coburn and the like support him, it’d be easier instead to support…
Mitt Romney. I’m not thrilled about someone to whom labels such as “panderer” and “flip-flopper” can be legitimately affixed. He has just always seemed to slick, too…politician-y. And shouldn’t he have a plan to simplify the tax code? I mean, he’s supposed to be the business guy in this race. Paul, Thompson, Giuliani and Huckabee all have/had such plans. Why doesn’t he? He wants to “clean up Washington” (a phrase I tire of hearing less than only “change”). Isn’t the tax code the best place to start? Hell, couldn’t you stop there, too?!? Still, at least this year (say what you will), he stands on the right side of more issues, in my mind, than McCain does. Regardless, if either is elected and don’t hew closely enough to the party line (i.e. Papa Bush), they’ll both be one-termers. Of course, the same thing could probably be said with regard to hewing close to the party line in the campaign, and that doesn’t seem to be holding true.
Finally, I want to say a pleasant ‘Good-bye’ to Mayor Giuliani. He has been 1st, 2nd or 3rd on my list the whole campaign (even though Fred moved ahead of him briefly, he wasn’t in the race long enough for me to have as good a vibe). I trusted him on national security. He said all the right things with regard to reforming health insurance. He was always quick to address the fallacy in thinking that revenues can only be increased by raising taxes. He finally came out with a good idea for tax reform. It was looking for a while like his Florida/Super Tuesday strategy might just work. I personally think the tipping point came in the debate where he and Romney went at it over sanctuary cities. He seemed petty with the “sanctuary mansion” tack. Plus, that was also about the time it was alleged that his then-mistress may have been protected with taxpayer funds. That gave me a sour feeling (it was also about that time that Fred came out with his 2-rate, optional income-tax return). That’s when he dropped to 3rd on my list. But still, I would have more enthusiastically supported him than either McCain or Romney. I suppose it wasn’t mean to be.
Unless of course McCain taps him for V.P. That would make my day in that it would effectively smooth the path for a Rudy nomination after McCain’s time passes.
I guess there’s hope.
McCain is, as he likes to proclaim, a “straight-shooter”. Problem is, many of his shots are in the wrong direction i.e. man-mad global warming, the evilness of the pharmaceutical industry, campaign-finance reform, etc. (I do believe he has sincerely seen the problem with the immigration bill he tried to ram through last summer) He voted against the tax cuts and has said nothing more than he sign major tax reform if it “hit his desk”. That’s code for “It ain’t my issue and I’m not gonna push it.” And, although both Reagan and W proved you can never be sure, given his aforementioned errant ways, I’m not sure he’d nominate the right people to the federal bench. The only two areas in which I’ve been a big fan of his are national security/foreign policy hawkishness and his stance against federal spending. And if it wasn’t for the fact that Jack Kemp, Phil Gramm and Tom Coburn and the like support him, it’d be easier instead to support…
Mitt Romney. I’m not thrilled about someone to whom labels such as “panderer” and “flip-flopper” can be legitimately affixed. He has just always seemed to slick, too…politician-y. And shouldn’t he have a plan to simplify the tax code? I mean, he’s supposed to be the business guy in this race. Paul, Thompson, Giuliani and Huckabee all have/had such plans. Why doesn’t he? He wants to “clean up Washington” (a phrase I tire of hearing less than only “change”). Isn’t the tax code the best place to start? Hell, couldn’t you stop there, too?!? Still, at least this year (say what you will), he stands on the right side of more issues, in my mind, than McCain does. Regardless, if either is elected and don’t hew closely enough to the party line (i.e. Papa Bush), they’ll both be one-termers. Of course, the same thing could probably be said with regard to hewing close to the party line in the campaign, and that doesn’t seem to be holding true.
Finally, I want to say a pleasant ‘Good-bye’ to Mayor Giuliani. He has been 1st, 2nd or 3rd on my list the whole campaign (even though Fred moved ahead of him briefly, he wasn’t in the race long enough for me to have as good a vibe). I trusted him on national security. He said all the right things with regard to reforming health insurance. He was always quick to address the fallacy in thinking that revenues can only be increased by raising taxes. He finally came out with a good idea for tax reform. It was looking for a while like his Florida/Super Tuesday strategy might just work. I personally think the tipping point came in the debate where he and Romney went at it over sanctuary cities. He seemed petty with the “sanctuary mansion” tack. Plus, that was also about the time it was alleged that his then-mistress may have been protected with taxpayer funds. That gave me a sour feeling (it was also about that time that Fred came out with his 2-rate, optional income-tax return). That’s when he dropped to 3rd on my list. But still, I would have more enthusiastically supported him than either McCain or Romney. I suppose it wasn’t mean to be.
Unless of course McCain taps him for V.P. That would make my day in that it would effectively smooth the path for a Rudy nomination after McCain’s time passes.
I guess there’s hope.
Tuesday, December 11, 2007
The Most Pure Kind of Passion
"It's always fascinating, however, to read about the passion Paul does inspire in his fans."
http://time-blog.com/real_clear_politics/2007/12/the_daily_2008_180.html
It's the purest, most admirable kind of passion because the guy is the straightest shooter up there. I mean, how can you go wrong when you the Constitution is your guide 100% of the time?? I'd argue that his supporters are the most dedicated to the Constitution and have the most faith in what the Founding Fathers did. They have the most respect for the Founding Fathers. Any supporter of the so-called "Living Constitution" or of any non-defense, non-justice taxpayer-funded government program or any regulation of private behavior, they think less of the wisdom of what the Founding Fathers put down in writing, whether it's the Constitution, the Declaration of Independence, the Federalist Papers, etc
http://time-blog.com/real_clear_politics/2007/12/the_daily_2008_180.html
It's the purest, most admirable kind of passion because the guy is the straightest shooter up there. I mean, how can you go wrong when you the Constitution is your guide 100% of the time?? I'd argue that his supporters are the most dedicated to the Constitution and have the most faith in what the Founding Fathers did. They have the most respect for the Founding Fathers. Any supporter of the so-called "Living Constitution" or of any non-defense, non-justice taxpayer-funded government program or any regulation of private behavior, they think less of the wisdom of what the Founding Fathers put down in writing, whether it's the Constitution, the Declaration of Independence, the Federalist Papers, etc
Monday, December 03, 2007
Please...
Giuliani Assails 'Fair Tax' Plan (http://www.breitbart.com/article.php?id=D8TA6KR80&show_article=1&catnum=0)
GREENSBORO, N.C. (AP) - Republican presidential hopeful Rudy Giuliani criticized the "fair tax" plan that has been touted by rival candidate Mike Huckabee on Monday, saying it could hurt home buyers.
The former New York City mayor cited the struggling U.S. housing market as a reason to avoid the plan, which would eliminate all taxes on income and investments in favor of a hefty federal sales tax.
A questioner asked about the plan but did not mention Huckabee. Nor did Giuliani mention his rival in his response.
"I think there are several tax deductions that are vital to our economy," Giuliani said. "This would not be a good time—I don't know if there would ever be a good time to do this—to advocate ending the home mortgage deduction. The home mortgage deduction is considered by many critical to the ability of people to buy a home and keep their home."
He also said deductions for charitable contributions and state and local taxes were important tax breaks that Huckabee's plan would eliminate."
====
Who would seriously want to keep the system we have now, instead of a much simpler, less time-consuming option, just for the deductions? No tax deduction is "vital" to the economy. People won't refrain from buying a house because they won't get to write part of it off. And it has been shown that charitable giving actually increases when taxes are lowered, not necessarily when deductions are increased.
It'd be one thing if he were showing how his radical tax simplification plan was preferable, but he's not. Only Thompson and Paul could do that. How does Rudy want to drastically reform the tax code??
GREENSBORO, N.C. (AP) - Republican presidential hopeful Rudy Giuliani criticized the "fair tax" plan that has been touted by rival candidate Mike Huckabee on Monday, saying it could hurt home buyers.
The former New York City mayor cited the struggling U.S. housing market as a reason to avoid the plan, which would eliminate all taxes on income and investments in favor of a hefty federal sales tax.
A questioner asked about the plan but did not mention Huckabee. Nor did Giuliani mention his rival in his response.
"I think there are several tax deductions that are vital to our economy," Giuliani said. "This would not be a good time—I don't know if there would ever be a good time to do this—to advocate ending the home mortgage deduction. The home mortgage deduction is considered by many critical to the ability of people to buy a home and keep their home."
He also said deductions for charitable contributions and state and local taxes were important tax breaks that Huckabee's plan would eliminate."
====
Who would seriously want to keep the system we have now, instead of a much simpler, less time-consuming option, just for the deductions? No tax deduction is "vital" to the economy. People won't refrain from buying a house because they won't get to write part of it off. And it has been shown that charitable giving actually increases when taxes are lowered, not necessarily when deductions are increased.
It'd be one thing if he were showing how his radical tax simplification plan was preferable, but he's not. Only Thompson and Paul could do that. How does Rudy want to drastically reform the tax code??
Sunday, December 02, 2007
Theoretically Wrong; Practically...Correct
I was going to give a regular guy's rebuttal to Michael Kinsley's piece in the L.A. Times yesterday ("Flat-tax and spend GOP", http://www.latimes.com/news/opinion/la-oe-kinsley1dec01,0,1162496.story?coll=la-opinion-rightrail). I was so confident that I could provide a quality response to his 'I-don't-know-how-he-won;-I-don't-know-anyone-who-voted-for-him' attitude and tone, but he got me in the end, (ahem) so to speak.
Maybe he was just exaggerating when he said he thinks "approximately zero" people would go for the simplicity of a flat tax or embedded (it's NOT a sales tax) FairTax if it meant losing deductions which would thereby increase their tax bills. To that, I was going to say he must have forgotten the approximately 6 billion hours Americans take each year to file their taxes. He must not fully understand the concept of opportunity cost. Some of those hours are hours that could be spent doing something else, whether something leisurely or productive. And what about all the money people already spend to have their taxes done for them? My guess is that those who have more and varied deductions might pay more and/or spend more time to do their taxes. That might make it a wash. To use Fred Thompson's plan on us as an example, we could choose to pay a flat 10% for this year. After accounting for personal exemptions ($39K for a family of 4, ~$49K when extrapolating that out to a family of 5, such as ours), our tax bill would roughly be what it would the same either way. Hmm, I'll go the simpler, flatter route. The only problem with Thompson's plan (and it's a small one, given that it is, after all, a step in the right direction) is that the rate would go up to 25% after income of $100K. As it stands right now, we straddle that line in that the missus works part time while our girls are pre-K. What will be the incentive for her to go back to work some more, not necessarily full-time if the little bit we go over $100K would compel us to pay another 15% in marginal taxes? We'd have more incentive for her to keep us just under that threshold to avoid it. Now THERE'S a system meant to foster productivity!
Then I wondered if the Congressional Joint Committee on Taxation uses the same kinda static scoring of this tax cut that always, always overestimates the revenue shortfall from a tax cut (or, for that matter, underestimates the revenue increase from a tax hike). Why, oh why is it always assumed that the tax base will stay the exact same after alterations to the tax code? This is the folly that is the liberals' belief that wealth just occurs. It will always be there for more taxing. It never occurs to them...do they think it appeared just out of thin air?? Do they not think it has to be created it? Do they not think increased taxation is a disincentive to create more, or at least to change reporting structures so as to shelter more from taxation??
I was also going to no doubt perplex Mr. Kinsley again by raising my hand to say I'd accept lower Social Security payments (as long as I get back close to what I put in; please, just that) for a simpler tax code. I believe Thompson would also allow me to take back some of my contributions and invest them on my own, which I know could earn me a higher return.
He went on to say some other goofy stuff, like if person A's taxes go down, person B's taxes must necessarily go up, before stating the obvious: "The GOP bluff has been called. Republicans had six years in which they controlled the White House and (for most of that time) Congress. They could have cut any spending they wanted. They did the opposite. None of the realistic Republican presidential possibilities is discussing spending cuts except in the vaguest terms."
That makes it tough to be an enthusiastic GOP supporter.
Maybe he was just exaggerating when he said he thinks "approximately zero" people would go for the simplicity of a flat tax or embedded (it's NOT a sales tax) FairTax if it meant losing deductions which would thereby increase their tax bills. To that, I was going to say he must have forgotten the approximately 6 billion hours Americans take each year to file their taxes. He must not fully understand the concept of opportunity cost. Some of those hours are hours that could be spent doing something else, whether something leisurely or productive. And what about all the money people already spend to have their taxes done for them? My guess is that those who have more and varied deductions might pay more and/or spend more time to do their taxes. That might make it a wash. To use Fred Thompson's plan on us as an example, we could choose to pay a flat 10% for this year. After accounting for personal exemptions ($39K for a family of 4, ~$49K when extrapolating that out to a family of 5, such as ours), our tax bill would roughly be what it would the same either way. Hmm, I'll go the simpler, flatter route. The only problem with Thompson's plan (and it's a small one, given that it is, after all, a step in the right direction) is that the rate would go up to 25% after income of $100K. As it stands right now, we straddle that line in that the missus works part time while our girls are pre-K. What will be the incentive for her to go back to work some more, not necessarily full-time if the little bit we go over $100K would compel us to pay another 15% in marginal taxes? We'd have more incentive for her to keep us just under that threshold to avoid it. Now THERE'S a system meant to foster productivity!
Then I wondered if the Congressional Joint Committee on Taxation uses the same kinda static scoring of this tax cut that always, always overestimates the revenue shortfall from a tax cut (or, for that matter, underestimates the revenue increase from a tax hike). Why, oh why is it always assumed that the tax base will stay the exact same after alterations to the tax code? This is the folly that is the liberals' belief that wealth just occurs. It will always be there for more taxing. It never occurs to them...do they think it appeared just out of thin air?? Do they not think it has to be created it? Do they not think increased taxation is a disincentive to create more, or at least to change reporting structures so as to shelter more from taxation??
I was also going to no doubt perplex Mr. Kinsley again by raising my hand to say I'd accept lower Social Security payments (as long as I get back close to what I put in; please, just that) for a simpler tax code. I believe Thompson would also allow me to take back some of my contributions and invest them on my own, which I know could earn me a higher return.
He went on to say some other goofy stuff, like if person A's taxes go down, person B's taxes must necessarily go up, before stating the obvious: "The GOP bluff has been called. Republicans had six years in which they controlled the White House and (for most of that time) Congress. They could have cut any spending they wanted. They did the opposite. None of the realistic Republican presidential possibilities is discussing spending cuts except in the vaguest terms."
That makes it tough to be an enthusiastic GOP supporter.
Thursday, November 29, 2007
The FairTax Clarified...Finally!
Now I think I get it.
Back a few months, I read the back and forth between Neal Boortz and Bruce Bartlett regarding the the FairTax. The former, you may know, is a radio talk show host who co-authored a book on the subject with prime proponent in the House of Representatives, John Linder of Georgia. The latter is a columnist who has served as deputy assistant secretary for economic policy at the U.S. Treasury Department (1988 - 1993) and executive director of the Joint Economic Committee of Congress before that. Bartlett, no doubt, felt compelled to study and comment on the FairTax in, given the unexpectedly strong finish by former Arkansas governor Mike Huckabee in the Ames Straw Poll of candidates for the republican nomination for president. Huckabee's support for the FairTax is arguably one of his signature issues. Even though a flat tax is my preferred form of tax reform (simpler, does not require the repeal of a Constitutional amendment), I want to understand the FairTax.
One of Bartlett's main critiques, as written in The Wall Street Journal, was that it would actually be a 30% tax on all goods and services. Many others have made this claim, too. For example, if you buy a home for $100,000, it would actually end up costing $130,000. So naturally, Boortz felt compelled to write an entry on his blog Neal's Nuze (http://boortz.com/nuze/index.html) in an effort to clarify. To use our home example (Boortz actually used a $100 lamp, which changed to a $100 griddle for another clarification op-ed yesterday), he said the tax was already figured into the price of the house. Essentially, it's a $77,000 house with a $23,000 tax added. Hence, the $100,000 final price tag. I don't know about you, but I've always assumed that the FairTax is basically a national sales tax. Therefore, I saw a $23,000 tax on a $77,000 home. Living in Texas, I know sales taxes are computed on products bought. Using that logic, I came to, voila, a 30% tax.
So far, no good. I was confused and not being anymore swayed from the flat tax.
So I emailed him. I agree with much of what Boortz says and admire the passion and assertiveness with which he opines and explains. But, at least on this issue, the resulting clarity of his attempted explanations did not match his flabbergastedness over the fact that some people still don't get it. If someone with a graduate degree in economics and a big interest in serious tax reform/simplification still doesn't quite understand it, I'm betting more than a few other people don't get it either.
Alas, I get it now, thanks to another effort by him (http://www.townhall.com/columnists/NealBoortz/2007/11/27/the_fairtax_--_the_truth) to explain it in response to another critique, this time by Hank Adler of Townhall.com (Give him credit for continually being up to the challenge of trying to explain this issue. It finally helped at least one person understand it). One word and one phrase helped me see the light: embedded and "sales tax". The part that stumped me was the fact that the FairTax is often taken as synonymous with a sales tax. Again, living in Texas all my life, I'm sure I'm not the only one who understands that a sales tax of, say, 8% is added to the cost of a $1.29 soda, thereby making it $1.39. The way the final price of a good is figured out using the embedded FairTax is to divide the final cost of the product by 77%.
In the same way people need to unlearn what they've been told/taught with regard to tax cuts draining and tax hikes raising federal revenue, FairTax proponents need to clarify that it is not a sales tax. I almost flipped my lid last night while watching the CNN/YouTube GOP Presidential debate, when the I-Want-You animated Uncle Sam character came on asking if any of the candidates supported the "FairTax...sales tax"! Almost a quarter of the electoral votes needed to win the presidency reside in states that employ a sales tax rather than a personal income tax, and those states (Texas, Florida and Nevada) are 3 of the fastest growing states in the union. That share could possible approach a 1/3 by the time the 2012 Presidential election rolls around. So this is a clarification that needs to occur if there is any chance that the FairTax ever becomes a reality.
The part of his defense of a couple months ago I sufficiently understood was the fact that the tax is embedded in the price of a product (A $23 tax within the $100 cost of a lamp). It made sense to me that part of the cost of a good is the income tax that company pays, the payroll taxes it pays, the income taxes paid by the employees of the company, etc. The first bit of protest a person would lodge against this theory is "What makes you so sure a company would lower it's price by something close to the 22% currently estimated to be embedded in products?" I've heard similar doubts with regard to salaries increasing when companies no long have less of an incentive to offer/provide health insurance than a person has to buy it on his/her own. The answer I offer is basically the same one I give whenever someone, in a temporary bout of insanity, says "The big oil & gas companies are conspiring the keep gas prices high." If a company, after having been relieved of the burden of myriad taxes, still charges what it did before, some enterprising individual will figure it out and enter the market to sell that product at a lower price. If that individual, in the interests of making as much as he/she can, doesn't quite come down as much as possible (say, 15% of the estimated 22%), another one will come along and drop the price further, and so on and so on.
The only problem with that is the current American psyche that has to have everything right now! True, in the short run, where unfortunately too many Americans live these days, there might very well be a producer surplus, where prices are slow adjust and come down once the FairTax is enacted. But they will, and eventually that producer surplus will become a consumer surplus. One need look no further for an example than the price of televisions over the years. Perhaps you've noticed that the price of flat-panels t.v.'s, whether LCD or plasma, has dropped drastically in the last few years. Even though this is more the result of supply-side economics, the similarity is that other producers saw opportunity and started offering their t.v.'s for lower prices. The same would inevitably happen when adjusting to a new, more efficient tax scheme. That's the beauty of the dynamism of our free-market economy.
Back a few months, I read the back and forth between Neal Boortz and Bruce Bartlett regarding the the FairTax. The former, you may know, is a radio talk show host who co-authored a book on the subject with prime proponent in the House of Representatives, John Linder of Georgia. The latter is a columnist who has served as deputy assistant secretary for economic policy at the U.S. Treasury Department (1988 - 1993) and executive director of the Joint Economic Committee of Congress before that. Bartlett, no doubt, felt compelled to study and comment on the FairTax in, given the unexpectedly strong finish by former Arkansas governor Mike Huckabee in the Ames Straw Poll of candidates for the republican nomination for president. Huckabee's support for the FairTax is arguably one of his signature issues. Even though a flat tax is my preferred form of tax reform (simpler, does not require the repeal of a Constitutional amendment), I want to understand the FairTax.
One of Bartlett's main critiques, as written in The Wall Street Journal, was that it would actually be a 30% tax on all goods and services. Many others have made this claim, too. For example, if you buy a home for $100,000, it would actually end up costing $130,000. So naturally, Boortz felt compelled to write an entry on his blog Neal's Nuze (http://boortz.com/nuze/index.html) in an effort to clarify. To use our home example (Boortz actually used a $100 lamp, which changed to a $100 griddle for another clarification op-ed yesterday), he said the tax was already figured into the price of the house. Essentially, it's a $77,000 house with a $23,000 tax added. Hence, the $100,000 final price tag. I don't know about you, but I've always assumed that the FairTax is basically a national sales tax. Therefore, I saw a $23,000 tax on a $77,000 home. Living in Texas, I know sales taxes are computed on products bought. Using that logic, I came to, voila, a 30% tax.
So far, no good. I was confused and not being anymore swayed from the flat tax.
So I emailed him. I agree with much of what Boortz says and admire the passion and assertiveness with which he opines and explains. But, at least on this issue, the resulting clarity of his attempted explanations did not match his flabbergastedness over the fact that some people still don't get it. If someone with a graduate degree in economics and a big interest in serious tax reform/simplification still doesn't quite understand it, I'm betting more than a few other people don't get it either.
Alas, I get it now, thanks to another effort by him (http://www.townhall.com/columnists/NealBoortz/2007/11/27/the_fairtax_--_the_truth) to explain it in response to another critique, this time by Hank Adler of Townhall.com (Give him credit for continually being up to the challenge of trying to explain this issue. It finally helped at least one person understand it). One word and one phrase helped me see the light: embedded and "sales tax". The part that stumped me was the fact that the FairTax is often taken as synonymous with a sales tax. Again, living in Texas all my life, I'm sure I'm not the only one who understands that a sales tax of, say, 8% is added to the cost of a $1.29 soda, thereby making it $1.39. The way the final price of a good is figured out using the embedded FairTax is to divide the final cost of the product by 77%.
In the same way people need to unlearn what they've been told/taught with regard to tax cuts draining and tax hikes raising federal revenue, FairTax proponents need to clarify that it is not a sales tax. I almost flipped my lid last night while watching the CNN/YouTube GOP Presidential debate, when the I-Want-You animated Uncle Sam character came on asking if any of the candidates supported the "FairTax...sales tax"! Almost a quarter of the electoral votes needed to win the presidency reside in states that employ a sales tax rather than a personal income tax, and those states (Texas, Florida and Nevada) are 3 of the fastest growing states in the union. That share could possible approach a 1/3 by the time the 2012 Presidential election rolls around. So this is a clarification that needs to occur if there is any chance that the FairTax ever becomes a reality.
The part of his defense of a couple months ago I sufficiently understood was the fact that the tax is embedded in the price of a product (A $23 tax within the $100 cost of a lamp). It made sense to me that part of the cost of a good is the income tax that company pays, the payroll taxes it pays, the income taxes paid by the employees of the company, etc. The first bit of protest a person would lodge against this theory is "What makes you so sure a company would lower it's price by something close to the 22% currently estimated to be embedded in products?" I've heard similar doubts with regard to salaries increasing when companies no long have less of an incentive to offer/provide health insurance than a person has to buy it on his/her own. The answer I offer is basically the same one I give whenever someone, in a temporary bout of insanity, says "The big oil & gas companies are conspiring the keep gas prices high." If a company, after having been relieved of the burden of myriad taxes, still charges what it did before, some enterprising individual will figure it out and enter the market to sell that product at a lower price. If that individual, in the interests of making as much as he/she can, doesn't quite come down as much as possible (say, 15% of the estimated 22%), another one will come along and drop the price further, and so on and so on.
The only problem with that is the current American psyche that has to have everything right now! True, in the short run, where unfortunately too many Americans live these days, there might very well be a producer surplus, where prices are slow adjust and come down once the FairTax is enacted. But they will, and eventually that producer surplus will become a consumer surplus. One need look no further for an example than the price of televisions over the years. Perhaps you've noticed that the price of flat-panels t.v.'s, whether LCD or plasma, has dropped drastically in the last few years. Even though this is more the result of supply-side economics, the similarity is that other producers saw opportunity and started offering their t.v.'s for lower prices. The same would inevitably happen when adjusting to a new, more efficient tax scheme. That's the beauty of the dynamism of our free-market economy.
Friday, October 12, 2007
"For the Children" Is Not an Impenetrable Shield Anymore
I'm kinda confused why those on the right find it so hard that those on the left are dumbfounded by the reporting on the Frosts since Graeme's radio response to President Bush. This is, after all, an issue about the principle of personal responsibility, something the left has a hard time grappling with (http://www.realclearpolitics.com/articles/
2007/10/why_did_they_attack_graeme_fro.html). It seems kinda simple to me.
First of all, I know that's Maryland and this is Texas, so I'm sure there's a bit of a difference in the cost of living. But more than $400,000 worth of property and 3 nice/new cars is "modest"?? I don't think so. We have 2 cars, one of which is paid off and one which is brand new, but only ~40% financed thanks to having it's trade-in paid off. We have a 1/4 of the property. I think we're living a bit more modestly. "...the Frosts...are expected to sell their investment property to pay for health care. Why?" Because those assets are the very means with which they should!! If we were in their predicament, what would we do? Liquidate, as much as necessary to pay the bills. What are assets there for if not to be used, especially in an emergency situation?
And did I read that the Frosts' parents were OK financially? If that's the case, you also go to your family for help. Isn't a major system of support supposed to be the family? This is why some say big government contributes to the erosion of the family.
It's kinda sad that someone as seasoned (don't wanna say old, since I'm getting up there) and experienced as Mr. Dionne still refers to government as just some entity that has money (if you think about it, that's kinda how the left views the affluent; they just have money so higher taxes should result in higher revenue, never mind that that wealth actually has to be created). I say this in reference to his mention of "government-supported vouchers that would help Graeme attend his private school...(f)ederal money for private schools but not for health insurance?" First of all, the federal government should not be involved in public education. The 10th Amendment to the Constitution quite clearly implies this. But that's another subject. It is completely legitimate for parents to petition their state governments to be able to use the taxes THEY PAY to fund government schools, to pay for the school of their choice for their children. This is one kinda of choice that the left, ironically, does not favor. The opposition to it is sheer insanity. All schools would become private schools, in a way, but it would still be public education. Liberals continue to miss the boat when it comes to how much better the private sector provides goods than does the public sector.
Finally, I'd love to see where this "average family policy in employer-provided plans now costing more than $12,000 annually" figure comes from. My family of 5 pays about a 1/3 of that. It's hard for me to believe that we pay that much less than average.
2007/10/why_did_they_attack_graeme_fro.html). It seems kinda simple to me.
First of all, I know that's Maryland and this is Texas, so I'm sure there's a bit of a difference in the cost of living. But more than $400,000 worth of property and 3 nice/new cars is "modest"?? I don't think so. We have 2 cars, one of which is paid off and one which is brand new, but only ~40% financed thanks to having it's trade-in paid off. We have a 1/4 of the property. I think we're living a bit more modestly. "...the Frosts...are expected to sell their investment property to pay for health care. Why?" Because those assets are the very means with which they should!! If we were in their predicament, what would we do? Liquidate, as much as necessary to pay the bills. What are assets there for if not to be used, especially in an emergency situation?
And did I read that the Frosts' parents were OK financially? If that's the case, you also go to your family for help. Isn't a major system of support supposed to be the family? This is why some say big government contributes to the erosion of the family.
It's kinda sad that someone as seasoned (don't wanna say old, since I'm getting up there) and experienced as Mr. Dionne still refers to government as just some entity that has money (if you think about it, that's kinda how the left views the affluent; they just have money so higher taxes should result in higher revenue, never mind that that wealth actually has to be created). I say this in reference to his mention of "government-supported vouchers that would help Graeme attend his private school...(f)ederal money for private schools but not for health insurance?" First of all, the federal government should not be involved in public education. The 10th Amendment to the Constitution quite clearly implies this. But that's another subject. It is completely legitimate for parents to petition their state governments to be able to use the taxes THEY PAY to fund government schools, to pay for the school of their choice for their children. This is one kinda of choice that the left, ironically, does not favor. The opposition to it is sheer insanity. All schools would become private schools, in a way, but it would still be public education. Liberals continue to miss the boat when it comes to how much better the private sector provides goods than does the public sector.
Finally, I'd love to see where this "average family policy in employer-provided plans now costing more than $12,000 annually" figure comes from. My family of 5 pays about a 1/3 of that. It's hard for me to believe that we pay that much less than average.
Saturday, October 06, 2007
My Lone Divergence with Kudlow
Ironic, indeed, says Larry Kudlow today (http://www.realclearpolitics.com/articles/2007/10/anatomy_of_a_fabulous_fed_flip.html).
I’m just not sold that cutting the interest rate a couple weeks ago was the best thing. Do we really need more dollars in the system right now? Isn’t the dollar already weak enough (benefits to exports notwithstanding), and inflation a real enough threat? Most importantly, wouldn’t it be a good thing to steer Americans a little more away from charging on the credit card and more toward saving? For the record, I think the so-called trade deficit (since writing a paper on it in grad school, I refer to it as the ‘foreign direct investment surplus’) garners a much worse reputation than it deserves. It’s not nearly as much of a principled concern as the federal budget deficit, and national debt. It just seems a poor personality trait to me to charge something right now as opposed to saving for the purchase.
A step in this direction would have been supported by the Fed staying at 5.25%. I can only hope that this was a temporary, symbolic cut that allowed the markets to feel like the Fed was there at the ready, and that there will be no more cuts for a while. I actually wouldn’t lose any sleep if some inflation indicators perked up a little, compelling the Fed to pull rates back up. People have not incentive to stick some money in their savings accounts. We just do it because it’s a good idea to have some there. I’m sure we’re not the only ones who, at one point or another, had (much) more in credit card balances than in savings, or even assets such as automobiles.
For all the unwarranted worrying about the foreign direct investment surplus, it’d be hard not to see how the trade deficit wouldn’t come down if more domestic investment derived from Americans’ savings and investments, in something other than retirement accounts and homes. And really, how much of a negative effect would there be on the economy if Americans changed their habits in such a way? Even though some of the slowdown in consumer spending would be made up by the investment e made with their savings (via bank loans, stock investments, etc.), it could amount to just one quarter’s worth of GDP slowing. Once the adjustment is made, consumer spending could resume, but with real money instead of credit. Not only is that preferable financially, it would be good individually as people could teach themselves some discipline and patience. Plus, a new model of whatever they might want might be introduced, making the wait worth it.
On another note, do you really believe the recent jobs report would have been any, much different without the cut?? Please; I don’t think so. And while it might not have returned to its record heights of 14,000+, I bet the Dow Jones would have risen back up into the mid-to-upper 13,000s.
One last thing about the politics of all this. Speaking as a liberta
rian-conservative, while there is no part of me that believes Democrats espouse better ideas on economic and budget matters, Republicans deserve to be trailing Democrats in polling in all such matters (except taxes…huh?) . Almost 6 years of complete Republican control in D.C. and we get…a new farm bill, a tack on to Medicare, an expansion of the education department (doesn’t the Constitution prescribe that as a state matter in the 10th Amendment??), a 16,000-earmarked transportation bill, etc. etc. Is the budget deficit at a manageable level? Yes, but it could have been gone by now and paving the way for perhaps more tax cuts. Better yet, serious income tax reform. Who knows; we might have even had more success with Social Security reform.
Great; now I’m all depressed remembering what a lost opportunity Republicans had a few years ago.
Thursday, October 04, 2007
I Guess $40,000/year Wasn't Enough, Ay Gov. Richardson?
The American Federation of Teachers recently endorsed Hillary Clinton for the Democratic nomination for president (http://www.aft.org/presscenter/releases/2007/100307.htm). My reaction: who cares? Public education, I would point out, is something that should be a state matter. I guess that's kind of a quaint notion in this day of a federal department of education, NCLB and the like.
Regardless, establishment educators (I reserve these remarks for those actively involved in the union, because I'm sure there are some teachers and administrators who do not fit this characterization) these days still don't have students' and parents' best interests at heart, while at the same time essentially showing an utter lack of confidence in their own ability. If they, and the educational bureaucracy within which they exist in this country were, in fact, so confident, and really cared about the quality of public education, why would they stand in the way of allowing parents to choose where to send their kids' to school using the taxes they pay to support public education??
It's interesting on their website that they have pages for "Academic Freedom" and "Employee Free Choice Act". Yet, every time the issue of allowing parents of modest-to-low means the freedom to use at least a part of what they pay to support public education (I support public education, just not government schools), groups like this and the NEA vociferously oppose it. What are they so worried about?? There will always, always be demand for good teachers. I can only believe it is the paranoid and slackers amongst them who drive this opposition.
Too bad a dollar figure can't be applied to public education quality (results) in much the same way as they can be toward the U.S.-owned automobile industry. Hopefully, though, people will start to wonder why, as funding for government schools continues to increase unabated, the number of students being home/private schooled continues along the same trajectory. "Why is the rate of growth of funding increasing faster than the rate of growth in the public student body," they might ask.
Maybe then, the number of school choice legislators will also grow.
Regardless, establishment educators (I reserve these remarks for those actively involved in the union, because I'm sure there are some teachers and administrators who do not fit this characterization) these days still don't have students' and parents' best interests at heart, while at the same time essentially showing an utter lack of confidence in their own ability. If they, and the educational bureaucracy within which they exist in this country were, in fact, so confident, and really cared about the quality of public education, why would they stand in the way of allowing parents to choose where to send their kids' to school using the taxes they pay to support public education??
It's interesting on their website that they have pages for "Academic Freedom" and "Employee Free Choice Act". Yet, every time the issue of allowing parents of modest-to-low means the freedom to use at least a part of what they pay to support public education (I support public education, just not government schools), groups like this and the NEA vociferously oppose it. What are they so worried about?? There will always, always be demand for good teachers. I can only believe it is the paranoid and slackers amongst them who drive this opposition.
Too bad a dollar figure can't be applied to public education quality (results) in much the same way as they can be toward the U.S.-owned automobile industry. Hopefully, though, people will start to wonder why, as funding for government schools continues to increase unabated, the number of students being home/private schooled continues along the same trajectory. "Why is the rate of growth of funding increasing faster than the rate of growth in the public student body," they might ask.
Maybe then, the number of school choice legislators will also grow.
Tuesday, September 25, 2007
Shedding More Light
Fortunately, slooowly but surely, more light is being shed on "47 million Americans...uninsured" (http://www.mysanantonio.com/news/columnists/
cguerra/stories/MYSA092507.01B.guerra.345d50c.html).
The first and most striking being that 1/5 of them aren't even American! It was entertaining to watch Hillary Clinton this weekend assert that her plan wouldn't cover illegal immigrants, yet she, along with other demagogues, continue to cite that number. Isn't that at least a little disingenuous??
Also, more than 1/3 make more than $50,000, with almost 1/5 of those making more than $75,000. Many choose to go without, as is their perfect right. I once did, even though, at the time, I made less than $30,000. Whenever I went to the doctor, I paid out of pocket, which one could argue is better in that it exposes the patient to the true cost of health care today. More of that and costs might come down as a result of people thinking twice before going in for a simple cold.
Then there are those who are eligible for government plans but who haven't signed up. Who's fault is that??
The very snapshot nature of that figure explains that many of those "47 million" are without insurance (NOT without health care) only temporarily, for example due to the fact that they are between jobs, something that itself can be remedied by conferring upon individuals the same kind of tax treatment businesses receive.
I thought a little bit more this weekend about the fact that this could extend eligibility to kids living in households making more than $80,000. Put aside, for a moment, the outrageousness of that prospect, and the backdoor way in which it attempts to engulf a few more citizens into government-run health care. I understand that costs of living are different from state to state; $80,000 doesn't go as far, say, in California as it does here in Texas (and only partially due to higher taxes out there). This debate also brings to light the need, perhaps, to determine poverty rates based on state and local costs of living.
cguerra/stories/MYSA092507.01B.guerra.345d50c.html).
The first and most striking being that 1/5 of them aren't even American! It was entertaining to watch Hillary Clinton this weekend assert that her plan wouldn't cover illegal immigrants, yet she, along with other demagogues, continue to cite that number. Isn't that at least a little disingenuous??
Also, more than 1/3 make more than $50,000, with almost 1/5 of those making more than $75,000. Many choose to go without, as is their perfect right. I once did, even though, at the time, I made less than $30,000. Whenever I went to the doctor, I paid out of pocket, which one could argue is better in that it exposes the patient to the true cost of health care today. More of that and costs might come down as a result of people thinking twice before going in for a simple cold.
Then there are those who are eligible for government plans but who haven't signed up. Who's fault is that??
The very snapshot nature of that figure explains that many of those "47 million" are without insurance (NOT without health care) only temporarily, for example due to the fact that they are between jobs, something that itself can be remedied by conferring upon individuals the same kind of tax treatment businesses receive.
I thought a little bit more this weekend about the fact that this could extend eligibility to kids living in households making more than $80,000. Put aside, for a moment, the outrageousness of that prospect, and the backdoor way in which it attempts to engulf a few more citizens into government-run health care. I understand that costs of living are different from state to state; $80,000 doesn't go as far, say, in California as it does here in Texas (and only partially due to higher taxes out there). This debate also brings to light the need, perhaps, to determine poverty rates based on state and local costs of living.
Thursday, September 06, 2007
My Thoughts Right Now
In response to my inquiry the other day, my solid-red republican friend told me that he is as undecided as anyone with regard to the Presidential candidates. It gave me the opportunity to assess where I stand currently:
Romney seems too slick to me. As much as anyone, I can understand how someone can go from generally (not stridently) pro-choice to pro-life, but his history just seems too inconsistent.
Huckabee's "Club for Greed" comment and support of a national smoking ban have me souring on him. His support for the FairTax (I still prefer a flat tax, but either would be an improvement) and the health example he set by losing so much weight work in his favor. He's striking me as the closest to a Bush-Republican, which isn't 100% good thing.
McCain has too many strikes against him for me. Voted against the tax cuts, McCain-Feingold, he's bought into the blame-human aspect of global warming, the immigration thing (which immediately bit him in the ass), etc. His military service, his consistency and foreign policy stances work for him.
Don't know enough about Fred yet. Between his March "I-might-run" announcement and now, he's written many good things on townhall.com.
Paul is the person with whom I agree the most, especially since I found out he is pro-life. He acknowledges the wasted, double-standard nature of the vaunted War on Drugs. He's for the kind of scaled back government I'd like to see. I'm not sure I agree with his anti-Federal Reserve stance. He's for pure free trade, not the "managed" kind that works around tariffs and other artificial barriers. And there's a couple thoughts I've always had that make me curious about his foreign policy stance: why were we as involved as we were with Iran in the years leading up to the hostage crisis (reading up on that is at the top of my if-I-had-more-hours-in-the-day list), and would Reagan have gone to such lengths to kick Saddam out of Kuwait? Part of me thinks we dole out way too much in foreign aid (actually, 90% of me thinks that) and that we're too involved, whether overtly or covertly, in other countries' affairs. Anyway, chances of him being elected are slim.
That's why I'm still leaning solidly toward Giuliani. I like his idea on health insurance reform, which is a lot like W's. I have little doubt about his leadership and how forceful he'd be in promoting and defending our interests. I think he knows the correct prescription for a strong economy. While he's said the right thing about judges (which, in my mind, all but cancels out his pro-choice stance), what I've read about his history is a little inconsistent with that. Other than that, he's been consistent and unapologetic with regard to who he is and what he believes. Take him or leave him. Plus, it'd be different to have a former mayor as president. And who else could put New York and California in play more than him?
Out of all those, however, I think Newt is the smartest.
Romney seems too slick to me. As much as anyone, I can understand how someone can go from generally (not stridently) pro-choice to pro-life, but his history just seems too inconsistent.
Huckabee's "Club for Greed" comment and support of a national smoking ban have me souring on him. His support for the FairTax (I still prefer a flat tax, but either would be an improvement) and the health example he set by losing so much weight work in his favor. He's striking me as the closest to a Bush-Republican, which isn't 100% good thing.
McCain has too many strikes against him for me. Voted against the tax cuts, McCain-Feingold, he's bought into the blame-human aspect of global warming, the immigration thing (which immediately bit him in the ass), etc. His military service, his consistency and foreign policy stances work for him.
Don't know enough about Fred yet. Between his March "I-might-run" announcement and now, he's written many good things on townhall.com.
Paul is the person with whom I agree the most, especially since I found out he is pro-life. He acknowledges the wasted, double-standard nature of the vaunted War on Drugs. He's for the kind of scaled back government I'd like to see. I'm not sure I agree with his anti-Federal Reserve stance. He's for pure free trade, not the "managed" kind that works around tariffs and other artificial barriers. And there's a couple thoughts I've always had that make me curious about his foreign policy stance: why were we as involved as we were with Iran in the years leading up to the hostage crisis (reading up on that is at the top of my if-I-had-more-hours-in-the-day list), and would Reagan have gone to such lengths to kick Saddam out of Kuwait? Part of me thinks we dole out way too much in foreign aid (actually, 90% of me thinks that) and that we're too involved, whether overtly or covertly, in other countries' affairs. Anyway, chances of him being elected are slim.
That's why I'm still leaning solidly toward Giuliani. I like his idea on health insurance reform, which is a lot like W's. I have little doubt about his leadership and how forceful he'd be in promoting and defending our interests. I think he knows the correct prescription for a strong economy. While he's said the right thing about judges (which, in my mind, all but cancels out his pro-choice stance), what I've read about his history is a little inconsistent with that. Other than that, he's been consistent and unapologetic with regard to who he is and what he believes. Take him or leave him. Plus, it'd be different to have a former mayor as president. And who else could put New York and California in play more than him?
Out of all those, however, I think Newt is the smartest.
Tuesday, July 31, 2007
The Minimum Wage Lives On, Unemploys More!
OK, time to speak up.
I was going to sit out recent discussion, including Carlos Guerra's piece last Thursday in the San Antonio Express News, about the increase in the federal minimum wage last week for a couple reasons. Based on my graduate studies, it affects so few people, and even fewer breadwinners these days, I thought there were more important topics out there. Plus, whenever I see a "Hiring" sign these days, particularly at fast food restaurants, they’re mostly starting at about $2 above the minimum.
The Heritage Foundation published an article in January of this year based on a study of exactly who and how many earn the minimum wage based on Bureau of Labor Statistics' Current Population Survey in 2006. It indicated (as I suspected and recalled) that 1.7 million Americans earn the minimum wage or less. That's just 1.3% of all U.S. workers. More than 62% of these, just over 1 million, are part-timers. Of those, almost 650,000 are between the ages of 18 and 24. I'd be willing to bet that most of those fit my characteristic when I was that age: living at home, not the sole-breadwinner and/or in school. That's not to deny that there were others, and I knew some, who were either out on their own and/or supporting children.
Mr. Guerra and the left-leaning Center for Public Policy Priorities, whom he cites, use a dividing age of "adults of 20 or older". OK. Seems to me 18-24 is a better segment to use as that is when many, if not most, young adults are still finding their way, trying to figure out what they want to do with their life. In the meantime, they are working hourly jobs. At any rate, it's hard to put into comparative context the fact that fewer that 70,000 minimum wage workers are single parents working full-time.
Then there's a whiff of Al "The-time-for-debate-is-over" Gore when Don Baylor, senior policy analyst for the CPPP, says "We need to take (minimum wage increases) off the table as a political issue..." Wow! So I guess people who argue that the minimum wage is a form of social promotion (giving workers a raise via government mandate as opposed to employers rewarding them solely on merit) should just shut up. And I guess people who have studied the topic even more than I have and found that there is a link between the minimum wage and teenage unemployment are just wasting their time. I wish I'd heard from people like Mr. Baylor sooner; I wouldn't have wasted all that time at school.
I was going to sit out recent discussion, including Carlos Guerra's piece last Thursday in the San Antonio Express News, about the increase in the federal minimum wage last week for a couple reasons. Based on my graduate studies, it affects so few people, and even fewer breadwinners these days, I thought there were more important topics out there. Plus, whenever I see a "Hiring" sign these days, particularly at fast food restaurants, they’re mostly starting at about $2 above the minimum.
The Heritage Foundation published an article in January of this year based on a study of exactly who and how many earn the minimum wage based on Bureau of Labor Statistics' Current Population Survey in 2006. It indicated (as I suspected and recalled) that 1.7 million Americans earn the minimum wage or less. That's just 1.3% of all U.S. workers. More than 62% of these, just over 1 million, are part-timers. Of those, almost 650,000 are between the ages of 18 and 24. I'd be willing to bet that most of those fit my characteristic when I was that age: living at home, not the sole-breadwinner and/or in school. That's not to deny that there were others, and I knew some, who were either out on their own and/or supporting children.
Mr. Guerra and the left-leaning Center for Public Policy Priorities, whom he cites, use a dividing age of "adults of 20 or older". OK. Seems to me 18-24 is a better segment to use as that is when many, if not most, young adults are still finding their way, trying to figure out what they want to do with their life. In the meantime, they are working hourly jobs. At any rate, it's hard to put into comparative context the fact that fewer that 70,000 minimum wage workers are single parents working full-time.
Then there's a whiff of Al "The-time-for-debate-is-over" Gore when Don Baylor, senior policy analyst for the CPPP, says "We need to take (minimum wage increases) off the table as a political issue..." Wow! So I guess people who argue that the minimum wage is a form of social promotion (giving workers a raise via government mandate as opposed to employers rewarding them solely on merit) should just shut up. And I guess people who have studied the topic even more than I have and found that there is a link between the minimum wage and teenage unemployment are just wasting their time. I wish I'd heard from people like Mr. Baylor sooner; I wouldn't have wasted all that time at school.
Monday, July 30, 2007
Is Dick Durbin Simply Unlucky?
I have to think Senator Dick Durbin (D.-Ill.) is a smart fellow. He is highly educated, and he is, after all, Assistant Majority Leader in the Senate. One does not ascend to such a post by being empty-headed, even if it is in the Democratic caucus. He would also have to be, one would think, a pretty decent politician. Yet, he lobs some of the softest pitches right down the middle of the plate when debating Republicans, more than any other senator or congressman/woman I can think of.
I remember an appearance he made on CNN's Crossfire in 2001. He was on opposite former Senator Rick Santorum (R.-Pa.) debating President Bush's tax cut proposal. Naturally, like all redistributionist's, he was whining about how unfair it was, how it was a "tax cut for the rich". Leave aside, for a moment, how obtuse of an argument that is (in an across-the-board cut, wouldn't those who pay the most save the most in taxes??). Senator Santorum broke it down in a perfectly simple way. If 4 people paid $40, $30, $20 and $10, respectively, to go to a ball game that ended up being rained out, if the Democrats were in charge of the refunds, they'd give all 4 a $20 refund, plus $20 for a guy walking past the ballpark who wasn't even going to the game. You have to hand that debate to Senator Santorum. Durbin just got beat.
It wasn't too smart of him, however, to compare treatment of prisoners at Guantanamo a couple years ago to treatment received by the those in Soviet gulags and Nazi concentration camps. Seriously, I understand pandering to the base, but don't such claims have to be tethered at least a little bit, perhaps by a hair, to truth? How do you compare 100s of enemy combatants to, by most accounts, 1000000s of innocents, including women and children? We feed these people probably more than they were eating on the battlefield. Did he seriously think not 1 of the 55 Republican senators at the time would stand up to debate him on that subject? The way Senator McConnell rose and asked "Is the Senator aware that millions died under Pol Pot?", for example, was entertaining. On the other hand, it was baffling, because it was still sinking in that Durbin made it so easy for Republicans to score political points.
Then a couple weeks ago came a debate on the Fairness Doctrine. Senator Durbin believes "that when Americans hear both sides of the story, they're in a better position to make a decision." Here was yet another hanging curve for someone to knock out of the park! How stupid does he think we are?? Every time a new issue comes to the fore, be it net neutrality, private equity taxation, the troop surge in Iraq, etc., I read both sides of the argument. I'd feel dishonest, disingenuous arguing or debating my point with someone if I didn't know all sides. I'd also feel kinda vulnerable not knowing the other side's argument. We don't get this information from only talk radio. When he asked "What is (sic) the marketplace does not provide opportunities to hear both points of view?" during a recent floor debate, Republican Senator Norm Coleman of Minnesota reminded him, as if he or we needed it, of the 1000s of "opportunities for stations and satellite, where you have cable, you have blogs, you have a whole range of information." I'm sure Senator Durbin has heard, for example, of The Daily Kos, or the Huffington Post, or The New York Times, although he probably thinks they have no slant. Funny thing about The Times. I used to read their columnists as regularly as I read conservative columnists. I miss Paul Krugman, yet they don't offer up their columnists for the kind of public balance that Senator Durbin et al seek.
Sometimes, his statements simply prey on the ignorance and fear of the population. One of the Democratic goals this Congress was to assume negotiating power on behalf of Medicare prescription drugs. If Congress takes that power from insurance companies, they will achieve monopsony power. Monopsony is the inverse of monopoly. Whereas a monopoly is the sole supplier of a good, a monopsony is the sole buyer. Think of a coal mining company in a small, mountain town. If that were allowed to occur, pharmaceutical companies would be brow-beaten into selling their product at a price determined by government bureaucrats, not by competing insurance companies. Watch R&D and the number of new drugs developed dwindle. This would be just another step in the government creep to take over the health care industry.
When I see Senator Durbin, I always kind of wonder if he knows there are smart people watching him, when there isn't a smart person sitting next to him to soundly refute what he says.
I remember an appearance he made on CNN's Crossfire in 2001. He was on opposite former Senator Rick Santorum (R.-Pa.) debating President Bush's tax cut proposal. Naturally, like all redistributionist's, he was whining about how unfair it was, how it was a "tax cut for the rich". Leave aside, for a moment, how obtuse of an argument that is (in an across-the-board cut, wouldn't those who pay the most save the most in taxes??). Senator Santorum broke it down in a perfectly simple way. If 4 people paid $40, $30, $20 and $10, respectively, to go to a ball game that ended up being rained out, if the Democrats were in charge of the refunds, they'd give all 4 a $20 refund, plus $20 for a guy walking past the ballpark who wasn't even going to the game. You have to hand that debate to Senator Santorum. Durbin just got beat.
It wasn't too smart of him, however, to compare treatment of prisoners at Guantanamo a couple years ago to treatment received by the those in Soviet gulags and Nazi concentration camps. Seriously, I understand pandering to the base, but don't such claims have to be tethered at least a little bit, perhaps by a hair, to truth? How do you compare 100s of enemy combatants to, by most accounts, 1000000s of innocents, including women and children? We feed these people probably more than they were eating on the battlefield. Did he seriously think not 1 of the 55 Republican senators at the time would stand up to debate him on that subject? The way Senator McConnell rose and asked "Is the Senator aware that millions died under Pol Pot?", for example, was entertaining. On the other hand, it was baffling, because it was still sinking in that Durbin made it so easy for Republicans to score political points.
Then a couple weeks ago came a debate on the Fairness Doctrine. Senator Durbin believes "that when Americans hear both sides of the story, they're in a better position to make a decision." Here was yet another hanging curve for someone to knock out of the park! How stupid does he think we are?? Every time a new issue comes to the fore, be it net neutrality, private equity taxation, the troop surge in Iraq, etc., I read both sides of the argument. I'd feel dishonest, disingenuous arguing or debating my point with someone if I didn't know all sides. I'd also feel kinda vulnerable not knowing the other side's argument. We don't get this information from only talk radio. When he asked "What is (sic) the marketplace does not provide opportunities to hear both points of view?" during a recent floor debate, Republican Senator Norm Coleman of Minnesota reminded him, as if he or we needed it, of the 1000s of "opportunities for stations and satellite, where you have cable, you have blogs, you have a whole range of information." I'm sure Senator Durbin has heard, for example, of The Daily Kos, or the Huffington Post, or The New York Times, although he probably thinks they have no slant. Funny thing about The Times. I used to read their columnists as regularly as I read conservative columnists. I miss Paul Krugman, yet they don't offer up their columnists for the kind of public balance that Senator Durbin et al seek.
Sometimes, his statements simply prey on the ignorance and fear of the population. One of the Democratic goals this Congress was to assume negotiating power on behalf of Medicare prescription drugs. If Congress takes that power from insurance companies, they will achieve monopsony power. Monopsony is the inverse of monopoly. Whereas a monopoly is the sole supplier of a good, a monopsony is the sole buyer. Think of a coal mining company in a small, mountain town. If that were allowed to occur, pharmaceutical companies would be brow-beaten into selling their product at a price determined by government bureaucrats, not by competing insurance companies. Watch R&D and the number of new drugs developed dwindle. This would be just another step in the government creep to take over the health care industry.
When I see Senator Durbin, I always kind of wonder if he knows there are smart people watching him, when there isn't a smart person sitting next to him to soundly refute what he says.
Thursday, July 26, 2007
Don't We Want to Be the Best?
Living in San Antonio, one might think I am mentally under the weather due to, well, the weather. We have received the most rain I can remember in my 7+ years living here. But guess what; I love it! It's keeping summer temperatures down, we don't have to water our lawn and, consequently, we're saving on our water and electric bills. The other day I heard news radio talk in terms of record levels for the Edwards Aquifer, the main source of drinking, bathing, watering, etc. water for the area. Incidentally enough, it was while doing one of my favorite things, reading bedtime stories to one of my girls, that all this came to head...in my head ("Daddy, why'd you stop reading?")
The first thing that came to mind is something that pops up from time to time; people paying attention to politics and the goings-on of their different levels of government about as often as they pay attention to the Olympics. What brought it to mind recently was an article in the Washington Post by Markus Prior ("The Real Media Divide", http://www.washingtonpost.com/wp-dyn/content/article/2007/07/15/AR2007071501110.html). It's no secret to those who know me that my T.V.-watching habits have changed and been squeezed in the last few years, basically ever since I started paying more attention to relevant stuff (the aforementioned politics and government). I should clarify what I mean by 'relevant'. Watching The Food Network or DIY and/or HGTV is probably relevant if you cook or build and/or decorate houses for a living. In his piece, he declares that "The new fault line of civic involvement is between news junkies and entertainment fans," with fewer than 20% making up the former. It doesn't surprise me that the other 4/5 have become even more entrenched in entertainment that "promises greater immediate gratification," and that, as a result, "cut down on their political participation" even more. What I lament is that they don't go far enough and just refrain from voting. Because they pay so little attention to politics, they are more susceptible to 30-sound bites, what makes politics politics and politicians politicians. If you don't know, for example, that tax increases on wealth and the creation thereof actually hurt the economy, or that school choice would actually help your child's education, please stay home on that first Tuesday after the first Monday every other November (research).
The second item to disappoint me stemmed from James Pethokoukis' blog entry in U.S. News & World Report yesterday ("1980s Redux: Hillary Clinton and Industrial Policy", http://www.usnews.com/blogs/capital-commerce/2007/7/23/1980s-redux-hillary-clinton-and-industrial-policy.html) concerning industrial planning. One could successfully start and finish the argument against industrial policy by simply saying, as Pethokoukis does, that it was the Democrats "'big idea' to counter Reagonmics", a philosophy that provided and/or laid the groundwork for the economic growth of the past quarter century. But that wouldn't be any fun. Pethokoukis hits the nail on the head when he counters the claim by Ezra Klein, he of the recent opinion that the U.S. can probably remain the wealthiest country in the world even if keeping people from working more ("Land of the Overworked and Tired", http://www.latimes.com/news/opinion/la-op-klein15jul15,0,6435203.story?coll=la-opinion-rightrail), that industrial policy seems to have worked in recent years for China and India by pointing out that "it's easier to run an industrial policy when you are a developing economy playing catch-up rather than a leading-edge economy that relies on innovation for future growth."
That gets to the heart of what depresses me; don't Democrats want us to remain a "leading-edge economy"? Don't they want us to remain the wealthiest country in the world, or do they perhaps feel guilty that we are, and want us to come back to the pack? Such a policy, along with their pro-union and "soak the rich" stances, would certainly do it. It would engender favoritism toward certain industries and big companies therein in the form of tax breaks, protective trade barriers, etc. For one, under Democratic leadership, it would, no doubt, be easier to unionize workers. Thanks to the hit the bottom line that results at least partly from unionization, trade barriers would have to go up to protect these companies from foreign competition (never mind the screwing the consumer gets). After all, we can't allow this policy to fail, now can we?? To pay for the tax breaks derived from the favoritism, the unfavored companies would effectively have to pony up more. Sure, "the rich" are "the rich" no matter how they make their money (assuming Democrats believe wealth is actually created), but the favored "rich" aren't as affected by their personal income taxes because of how handsomely their rent-seeking activities would probably be paying off. In the meantime, the unfavored, and everyone else for that matter, are being discouraged from inventing new and improving existing products. Where's the incentive when you're being taxed more??
Did I mention that ever-increasing trade barriers and taxes hurt the overall economy, both on the supply and demand side? I'll save that for another day. Right now, I'm going to go watch storm clouds gather and enjoy myself.
The first thing that came to mind is something that pops up from time to time; people paying attention to politics and the goings-on of their different levels of government about as often as they pay attention to the Olympics. What brought it to mind recently was an article in the Washington Post by Markus Prior ("The Real Media Divide", http://www.washingtonpost.com/wp-dyn/content/article/2007/07/15/AR2007071501110.html). It's no secret to those who know me that my T.V.-watching habits have changed and been squeezed in the last few years, basically ever since I started paying more attention to relevant stuff (the aforementioned politics and government). I should clarify what I mean by 'relevant'. Watching The Food Network or DIY and/or HGTV is probably relevant if you cook or build and/or decorate houses for a living. In his piece, he declares that "The new fault line of civic involvement is between news junkies and entertainment fans," with fewer than 20% making up the former. It doesn't surprise me that the other 4/5 have become even more entrenched in entertainment that "promises greater immediate gratification," and that, as a result, "cut down on their political participation" even more. What I lament is that they don't go far enough and just refrain from voting. Because they pay so little attention to politics, they are more susceptible to 30-sound bites, what makes politics politics and politicians politicians. If you don't know, for example, that tax increases on wealth and the creation thereof actually hurt the economy, or that school choice would actually help your child's education, please stay home on that first Tuesday after the first Monday every other November (research).
The second item to disappoint me stemmed from James Pethokoukis' blog entry in U.S. News & World Report yesterday ("1980s Redux: Hillary Clinton and Industrial Policy", http://www.usnews.com/blogs/capital-commerce/2007/7/23/1980s-redux-hillary-clinton-and-industrial-policy.html) concerning industrial planning. One could successfully start and finish the argument against industrial policy by simply saying, as Pethokoukis does, that it was the Democrats "'big idea' to counter Reagonmics", a philosophy that provided and/or laid the groundwork for the economic growth of the past quarter century. But that wouldn't be any fun. Pethokoukis hits the nail on the head when he counters the claim by Ezra Klein, he of the recent opinion that the U.S. can probably remain the wealthiest country in the world even if keeping people from working more ("Land of the Overworked and Tired", http://www.latimes.com/news/opinion/la-op-klein15jul15,0,6435203.story?coll=la-opinion-rightrail), that industrial policy seems to have worked in recent years for China and India by pointing out that "it's easier to run an industrial policy when you are a developing economy playing catch-up rather than a leading-edge economy that relies on innovation for future growth."
That gets to the heart of what depresses me; don't Democrats want us to remain a "leading-edge economy"? Don't they want us to remain the wealthiest country in the world, or do they perhaps feel guilty that we are, and want us to come back to the pack? Such a policy, along with their pro-union and "soak the rich" stances, would certainly do it. It would engender favoritism toward certain industries and big companies therein in the form of tax breaks, protective trade barriers, etc. For one, under Democratic leadership, it would, no doubt, be easier to unionize workers. Thanks to the hit the bottom line that results at least partly from unionization, trade barriers would have to go up to protect these companies from foreign competition (never mind the screwing the consumer gets). After all, we can't allow this policy to fail, now can we?? To pay for the tax breaks derived from the favoritism, the unfavored companies would effectively have to pony up more. Sure, "the rich" are "the rich" no matter how they make their money (assuming Democrats believe wealth is actually created), but the favored "rich" aren't as affected by their personal income taxes because of how handsomely their rent-seeking activities would probably be paying off. In the meantime, the unfavored, and everyone else for that matter, are being discouraged from inventing new and improving existing products. Where's the incentive when you're being taxed more??
Did I mention that ever-increasing trade barriers and taxes hurt the overall economy, both on the supply and demand side? I'll save that for another day. Right now, I'm going to go watch storm clouds gather and enjoy myself.
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