Author Topic: Economics  (Read 268904 times)

DougMacG

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Re: Economics, Security Inequality
« Reply #500 on: August 24, 2020, 06:54:06 AM »
Wealthy people are going to move to places with fully functional police departments, because they can.

Poor people will be stuck living in places with “defunded” police departments, which will not work out well.

https://mobile.twitter.com/RakestrawJeff/status/1296223303372279808

DougMacG

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Re: Economics, Minimum Wage, Alan Reynolds 2006
« Reply #501 on: August 24, 2020, 07:04:53 AM »

Crafty_Dog

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WSJ: Low Rates Forever
« Reply #502 on: August 28, 2020, 08:27:39 AM »
Low Rates Forever!
The Federal Reserve takes a leap into the monetary unknown.
By The Editorial Board
Aug. 27, 2020 7:24 pm ET

Jerome Powell’s Federal Reserve on Thursday released a long-awaited review of its policy framework, and it’s a mixed bag. On the upside, the central bank will no longer throttle the economy whenever “too many” Americans have jobs. On the downside, the Fed may never raise interest rates again.

The Fed was overdue to rethink how it pursues its dual mandate of full employment and price stability. Most obviously, the two goals no longer appear to conflict in the way monetary economists once assumed.


Starting in the 1980s, the U.S. economy achieved unprecedented low unemployment without an uptick in consumer prices as orthodox theory had predicted. Instead, as Mr. Powell noted in announcing the new strategy, business cycles now seem more likely to end in financial panics than in inflationary spikes that trigger interest-rate increases.

One happy result is that the Fed is all but abandoning the discredited Phillips Curve, the theory that policy makers must trade off between employment and inflation. The Fed previously tried to head off inflation by raising rates whenever it thought the unemployment rate was falling too far—whatever that meant—but now the Fed will wait for inflation to appear before acting.

Abandoning the Phillips Curve is a win for the economy, but it comes at a substantial cost in this review as the Fed also is overhauling its inflation target. Since the Fed adopted inflation targeting in the late 1990s and early 2000s (and formalized a 2% target in 2012), policy makers have viewed the target as a ceiling.

No longer. The Fed now will aim to achieve “average” inflation of 2%, meaning it will tolerate periods of faster price rises to compensate for periods when inflation falls short. Mr. Powell believes such a symmetrical target is necessary to “anchor” inflation expectations.

This is a political minefield because the definition of the inflation time period will always be open for debate. Mr. Powell and future Fed chairs will face pressure to maintain low rates to compensate for some protracted period of low inflation, or because a Senator or Twitter-happy President “believes” inflation will fall below target in the near future.

That increases the economic risk that the Fed might end up looking through inflation until it’s too late. Having effectively admitted it no longer fully understands the relationship between economic growth, employment and inflation, the Fed still promises to decide in real time when its healthy above-target inflation has become dangerous. If the central bank gets this wrong, it could be forced to raise rates much higher, much faster than it would want.

The more glaring problem is the long list of questions the Fed didn’t review. The most important is Mr. Powell’s observation, offered without elaboration Thursday, that business cycles now end in destructive financial crises. The Fed thinks this is a regulatory problem to be solved with stricter capital rules and stress tests.

It might instead ask whether its preference over two decades for “looking through” rising asset prices such as oil, gold and housing to keep rates low is contributing to financial instability instead of economic growth. Without exploring this question, the Fed has adopted a strategy with a built-in bias for low rates. The result is almost certain to be more financial manias, panics and crashes.

There are other unanswered questions. For instance, the Fed now assumes that the economy’s natural rate of growth, and thus its natural interest rate (“r-star” in the lingo) are in a natural decline for demographic or other reasons. Mr. Powell cites this as a justification for the Fed’s new symmetrical inflation target.

Well, what if there’s nothing natural about falling growth because the Fed’s policies are causing it? Research suggests sustained low rates can dent an economy’s growth potential by steering investment to unproductive uses, sustaining zombie companies, rewarding corporate financial engineering instead of capital expenditure, and contributing to asset booms and busts. It’s a shame the Fed has decided to double down on its low-rate, quantitative-easing bets before such a self-examination.

The Fed says its review is a result of careful study, including a national listening tour in which officials met with ordinary Americans. The truth is that it’s a leap into the monetary unknown and potentially a very expensive one.

ccp

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Eviction moratorium
« Reply #503 on: September 02, 2020, 04:43:42 PM »
I don't agree with this but as we know Trump probably trying to beat the CRATs to the punch and the MSM who will show crying children sitting on a street curb on their living room sofa if he doesn't do it.

too bad for landlords

they don't deserve to feed THEIR families :


https://www.nationalreview.com/corner/trumps-eviction-moratorium-is-state-sanctioned-theft/

DougMacG

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Re: Eviction moratorium
« Reply #504 on: September 03, 2020, 06:52:33 AM »
I don't agree with this but as we know Trump probably trying to beat the CRATs to the punch and the MSM who will show crying children sitting on a street curb on their living room sofa if he doesn't do it.

too bad for landlords
they don't deserve to feed THEIR families :
https://www.nationalreview.com/corner/trumps-eviction-moratorium-is-state-sanctioned-theft/

A characteristic of third world countries is that they don't respect property rights and don't legally enforce contracts.

From the article:  "Property rights and the sanctity of those contracts are vital in a lawful society. The latter are now being torn up by government decree."

If you are not renting someone else's property, i.e. exchanging an agreed amount of money for your use of it, why are you still possessing it?  Criminal trespass, except not criminal because this trespassing is sanctioned by government.

Yes, landlords are hurt by eviction bans.  For many, it's not a debt issue but it's their life savings and livelihood.
 More importantly, the market for rental housing is hurt by eviction bans and therefore renters are hurt. 

This is an unconstitutional intervention by government IMHO.  The government purse could be open at the eviction court.  If they want tenants to stay without ability to pay, they can pay.  I thought that was the point of the unfunded trillions spent.  Government closed a business; government can pay for it.

If this crisis were real, allowing the broken housing contract to run its course would actually LOWER the cost of housing for low income renters.  This government intervention does the opposite.  Keeping properties off the market drives UP the cost of housing for every unit that actually goes to market.

Are investors rushing to build more rental units during covid eviction bans?  I sincerely doubt it.  So we go from short term disruption to long term trouble.

CDC is involved with this?  Government can prosecute speeding tickets remotely, but housing court?  No way.  It's the same, damn virus you morons.

"We are from the government and we are here to help you."    - Run when you hear this.

I would rather have my property vacant than be adversely occupied.

Good politics (no sane landlord will vote for Biden), and bad economics.  Bad combination.  Bad precedent.
« Last Edit: September 03, 2020, 07:02:03 AM by DougMacG »

DougMacG

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Re: Economics, T. Sowell
« Reply #505 on: September 07, 2020, 05:49:19 PM »
Prof Sowell, you were once a Leftist.  What changed your mind?
Sowell:  "Evidence.


Referring to coronavirus, Presidential candidate Joe Biden keeps saying he's going to listen to the scientists.  Too bad that never applies to economics.

DougMacG

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Economics, Socialism, Idea that Never Dies. Kristian Niemietz
« Reply #506 on: September 08, 2020, 06:39:19 AM »
We can't just call it socialism.  That term has better than 50% popularity within some important voting groups.  We have to explain what's wrong with it, why it doesn't work.  I call it denial of science, denial of math and denial of history, and that still doesn't persuade white, college educated young people.  Some black people are starting to see that the free money promised from the social programs doesn't begin to match the real money of free market prosperity available to anyone who wants to try - if your government will let you.

https://www.intellectualtakeout.org/article/why-socialism-failed-idea-never-dies/?fbclid=IwAR1gRSUfcnXt00En0OO6VVYYAkfRsAKHPS0DqyHOP0xVXCNE9UmtWjbl0yE

What would you say to an amateur chef who baked a cake following a certain recipe only for everyone who ate a slice to fall ill quickly afterward? Being such an enthusiastic baker, they bake the same cake a second time just a few weeks later, again following the same recipe, but this time with one or two slight adjustments. Unfortunately, the result is the same – everyone who eats the cake soon ends up feeling sick.

The cake baker repeats this more than two dozen times, always modifying the recipe a little, but the basic ingredients remain more or less the same despite the fact that their guests throw up every time. Of course, there’s no way such a thing would happen. The cake baker would soon realize that there is a major problem with the recipe and throw it away.

More Than Two Dozen Failed Experiments
Yet this is exactly what socialists have done:

Over the past hundred years, there have been more than two dozen attempts to build a socialist society. It has been tried in the Soviet Union, Yugoslavia, Albania, Poland, Vietnam, Bulgaria, Romania, Czechoslovakia, North Korea, Hungary, China, East Germany, Cuba, Tanzania, Benin, Laos, Algeria, South Yemen, Somalia, the Congo, Ethiopia, Cambodia, Mozambique, Angola, Nicaragua and Venezuela, among others. All of these attempts have ended in varying degrees of failure. How can an idea, which has failed so many times, in so many different variants and so many radically different settings, still be so popular? (p. 21)

This is the central question asked by this extremely important book from economist Kristian Niemietz, who works at the London Institute for Economic Affairs. He manages to provide the answer to his question in one sentence:

It is because socialists have successfully managed to distance themselves from those examples. (p. 55)

As soon as you confront socialists with examples of failed experiments, they always offer the following response: “These examples don’t prove anything at all! In fact, none of these are true socialist models.” During the “heyday” of most of these socialist experiments, however, intellectuals held quite a different view, as Niemietz illustrates with many examples.

Venezuela – “Socialism of the 21st Century”
The latest example of socialism’s failings is Venezuela, which just a few years ago was being hailed by leading intellectuals and left-wing politicians as a model for “Socialism of the 21st Century.” At a demonstration in commemoration of Hugo Chávez in London in March 2013, for example, current British Labour Party leader Jeremy Corbyn said:

Chávez… showed us that there is a different, and a better way of doing things. It’s called socialism… In his death, we will march on, to that better, just, peaceful and hopeful world. (p. 239)

And even as late as June 2015, when the failure of the socialist experiment in Venezuela was already evident, Corbyn repeated:

When we celebrate – and it is a cause for celebration – the achievements of Venezuela, in jobs, in housing, in health, in education, but above all, its role in the whole world as a completely different place, then we do that because we recognize what they have achieved, and how they’re trying to achieve it. (p. 246)

Just a few weeks later, he enthusiastically declared that “the Bolivarian revolution is in full swing and is providing inspiration across a whole continent.” Venezuela was praised as a successful counter-model to “neo-liberal policies.” (p. 247)

Praises of Stalin
Niemietz shows that even mass murderers such as Josef Stalin and Mao Zedong were enthusiastically celebrated by leading intellectuals of their time. These intellectuals were not outsiders but renowned writers and scholars, as Niemietz demonstrates with numerous examples. Even the concentration camps in the Soviet Union, the Gulags, were admired:

They were presented as places of rehabilitation, not punishment, where inmates were given a chance to engage in useful activities, while reflecting upon their mistakes.

A then-well-known American writer explained:

The labor camps have won high reputation throughout the Soviet Union as places where tens of thousands of men have been reclaimed. (p. 72)

Even journalists and intellectuals who didn’t completely turn a blind eye to the regime’s crimes found arguments to justify what was happening:

But – to put it brutally – you can’t make an omelet without breaking eggs and the Bolshevist leaders are just as indifferent to the casualties that may be involved in their drive toward socialization as any General during the World War who ordered a costly attack. (p. 80)

These sentences were written by The New York Times’ Moscow correspondent, who was head of the newspaper’s office in the Russian capital from 1922 to 1936.

Niemietz concedes that some socialist intellectuals did criticize the Soviet Union. But for many, their antipathy was the result of using utopian standards as a yardstick for judging real-world systems – utopian fantasies that no system in the world would have been able to live up to.

If one’s idea of socialism demands the immediate abolition of the police, the army, the court system, the prison system, etc., if it requires people to voluntarily give up money, private property, exchange, etc., and if one does not accept any compromises, halfway measures or phase-in periods, then yes, such a person would not have been seduced by Leninism. But this is simply because they would have set the bar impossibly high. A lot of early socialist critics of the Soviet Union fall into this category. (p. 98)

Adulation for Mao
Many Western intellectuals were enthusiastic in their support for Mao Zedong and his cultural revolution despite the 45 million lives lost during socialism’s greatest experiment – the Great Leap Forward – at the end of the 1950s alone. After Mao’s death, when Deng Xiaoping’s reform policies liberated hundreds of millions of Chinese from bitter poverty, these same intellectuals were nowhere near as enthusiastic about China as they had been in Mao’s day.

Just as ironically, the enthusiasm of Western intellectuals for China began to fade when the most murderous period was over… Western intellectuals had lavishly heaped praise on China when millions of Chinese people were starving or worked to death in forced labour camps. But when a programme of relative liberalisation lifted millions of people out of poverty, those intellectuals were conspicuous by their silence. Market-based reform programmes, no matter how successful, will never inspire pilgrimages. (p. 110-111)

Even the North Korean dictator Kim Il Sung and the murderous Khmer Rouge regime in Cambodia found admirers among Western intellectuals, as Niemietz demonstrates in two chapters of his book. And that’s not to mention Cuba and Che Guevara, who became a pop icon in the West.

When the Experiment Fails: “That Was Never True Socialism”
In his thorough historical analysis, Niemietz shows every socialist experiment to date has gone through three phases.

During the first phase, the honeymoon period (p. 56), intellectuals around the world are enthusiastic about the system and praise it to the heavens. This enthusiasm is always followed by a second phase, disillusionment, or as Niemietz calls it, “the excuses-and-whataboutery period.” (p. 57) During this phase, intellectuals still defend the system and its “achievements” but withdraw their uncritical support and begin to admit deficiencies, although these are often presented as the result of capitalist saboteurs, foreign forces, or boycotts by US imperialists.

Finally, the third phase sees intellectuals deny that it was ever truly a form of socialism, the not-real-socialism stage. (p. 57) This is the stage at which intellectuals line up to state that the country in question – for example, the Soviet Union, China, or Venezuela – was never really a socialist country. According to Niemietz, however, this line of argumentation is rarely presented during the first phase of a new socialist experiment and becomes the dominant view only after the socialist experiment has failed.

Nowadays, Western socialists do not even attempt to oppose real-world capitalism with historical examples of socialism. Instead, they put forward arguments based on the vague utopia of a “just” society. Sometimes, they cite “Nordic socialism” – i.e. the variant of socialism that emerged in countries like Sweden – as an example, although they completely forget that the Nordic countries, having learned from their failed socialist experiments of the 1970s, have long since abandoned the socialist path. Today – despite having higher taxes – they are no less capitalist than, for example, the United States.

In the author’s place, I would have dealt explicitly with “democratic socialism,” which has also always failed miserably. After all, the policies pursued by socialists in Great Britain and some high-profile members of the Democratic Party in the United States, namely very high taxation on the rich and a high level of state regulation of the economy, has certainly also been seen before in democratic countries, including Sweden and Great Britain in the 1970s. But even these experiments, despite not ending in totalitarian rule or even mass murder, were catastrophic for the economy and led to stubborn declines in prosperity.

Socialists who criticize Stalinism and other forms of real-world, historical socialism always fail to analyze the economic reasons for the failures of these systems. (p. 28) Their analyses attack the paucity of democratic rights and freedoms in these systems, but the alternatives they formulate are based on a vague vision of all-encompassing “democratization of the economy” or “worker control.” Niemietz shows that these are the exact same principles that initially underpinned the failed socialist systems in the Soviet Union and other countries.

When contemporary socialists talk about a non-autocratic, non-authoritarian, participatory and humanitarian version of socialism, they are not as original as they think they are. That was always the idea. This is what socialists have always said. It is not for a lack of trying that it has never turned out that way. (p. 42)

This is an incredible book and should be compulsory reading at schools and universities, where today the song sung by anti-capitalists reigns supreme. Niemietz argues with intellectual authority as he weighs, differentiates, and marshals a wealth of historical evidence in support of his thesis. No other author has so far managed to so convincingly explain why socialism has nevertheless continued to remain so attractive to this day despite the sharp lessons of bitter historical experience.

In his Lectures on the Philosophy of History, the German philosopher Hegel observed,

But what experience and history teach is this, – that peoples and governments never have learned anything from history, or acted on principles deduced from it.

It could well be that Hegel’s verdict is too harsh. Nevertheless, it does seem that the majority of people are unable to abstract and draw general conclusions from historical experience. Despite the numerous examples of capitalist economic policies leading to greater prosperity – and the failure of every single variant of socialism that has ever been tested under real-world conditions – many people still seem incapable of learning the most obvious lessons.
----
This article was originally published on FEE.org.
https://fee.org/articles/why-socialism-is-the-failed-idea-that-never-dies/

DougMacG

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« Last Edit: September 15, 2020, 04:37:07 PM by DougMacG »

Crafty_Dog

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Re: Economics
« Reply #508 on: September 18, 2020, 06:49:50 AM »
What a great find!


DougMacG

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Economics, Milton Friedman on Donahue - Your Greed or Their Greed?
« Reply #510 on: September 29, 2020, 04:36:47 PM »
https://www.youtube.com/watch?v=RWsx1X8PV_A

Donahue:  "You see around the globe the mal-distribution of wealth, the desperate plight of millions of people in underdeveloped countries.

When you see so few haves and so many have-nots, when you see the greed and the concentration of power … did you ever have a moment of doubt about capitalism, and whether greed’s a good idea to run on?"

Friedman:   "Well first of all, tell me, is there some society you know that does not run on greed?  Do you think that Russia doesn’t run on greed?  Do you think China doesn’t run on greed?  What is greed?  Of course none of us are greedy; it’s only the other fellow who’s greedy.  The world runs on individuals pursing their self-interest.

The great achievements of civilization have not come from government bureaucrats.  Einstein did not construct his theory under order from a bureaucrat.  Henry Ford didn’t revolutionize the automobile industry that way.

The only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade.

If you want to know where the masses are worst off, it is exactly in the kinds of societies that depart from that.  So that the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system."

https://imkane.wordpress.com/2019/03/08/milton-friedman-defends-capitalism-and-kos-phil-donahues-feel-good-socialism/

Full interview:  https://www.youtube.com/watch?v=1EwaLys3Zak
« Last Edit: September 29, 2020, 04:43:11 PM by DougMacG »

DougMacG

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Economics: Deficit spending = confiscation of wealth, Alan Greenspan
« Reply #511 on: October 02, 2020, 07:13:17 AM »
"Deficit spending is simply a scheme for the confiscation of wealth."
   - Alan Greenspan
http://libertytree.ca/quotes/Alan.Greenspan.Quote.37A2
« Last Edit: October 02, 2020, 07:40:17 AM by DougMacG »

DougMacG

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Walter Williams, 2009, Limit government while you still can
« Reply #512 on: December 12, 2020, 07:33:32 AM »
https://imprimis.hillsdale.edu/future-prospects-for-economic-liberty/?utm_campaign=williams&utm_medium=email&_hsmi=101929147&_hsenc=p2ANqtz-_0OBIk_wlKAidlkfDsa29tNO5Lo0I5bcQqp7JAVV4Fgc5n9KaX9r2AMW1VAIWbGjj0I9GRf0LhyLlvLM2aUlYsZtlpzA&utm_source=housefile

One of the justifications for the massive growth of government in the 20th and now the 21st centuries, far beyond the narrow limits envisioned by the founders of our nation, is the need to promote what the government defines as fair and just. But this begs the prior and more fundamental question: What is the legitimate role of government in a free society? To understand how America’s Founders answered this question, we have only to look at the rule book they gave us—the Constitution. Most of what they understood as legitimate powers of the federal government are enumerated in Article 1, Section 8. Congress is authorized there to do 21 things, and as much as three-quarters of what Congress taxes us and spends our money for today is nowhere to be found on that list. To cite just a few examples, there is no constitutional authority for Congress to subsidize farms, bail out banks, or manage car companies. In this sense, I think we can safely say that America has departed from the constitutional principle of limited government that made us great and prosperous.

On the other side of the coin from limited government is individual liberty. The Founders understood private property as the bulwark of freedom for all Americans, rich and poor alike. But following a series of successful attacks on private property and free enterprise—beginning in the early 20th century and picking up steam during the New Deal, the Great Society, and then again recently—the government designed by our Founders and outlined in the Constitution has all but disappeared. Thomas Jefferson anticipated this when he said, “The natural progress of things is for liberty to yield and government to gain ground.”

To see the extent to which liberty is yielding and government is gaining ground, one need simply look at what has happened to taxes and spending. A tax, of course, represents a government claim on private property. Every tax confiscates private property that could otherwise be freely spent or freely invested. At the same time, every additional dollar of government spending demands another tax dollar, whether now or in the future. With this in mind, consider that the average American now works from January 1 until May 5 to pay the federal, state, and local taxes required for current government spending levels. Thus the fruits of more than one third of our labor are used in ways decided upon by others. The Founders favored the free market because it maximizes the freedom of all citizens and teaches respect for the rights of others. Expansive government, by contrast, contracts individual freedom and teaches disrespect for the rights of others. Thus clearly we are on what Friedrich Hayek called the road to serfdom, or what I prefer to call the road to tyranny.

As I said, the Constitution restricts the federal government to certain functions. What are they? The most fundamental one is the protection of citizens’ lives. Therefore, the first legitimate function of the government is to provide for national defense against foreign enemies and for protection against criminals here at home. These and other legitimate public goods (as we economists call them) obviously require that each citizen pay his share in taxes. But along with people’s lives, it is a vital function of the government to protect people’s liberty as well—including economic liberty or property rights. So while I am not saying that we should pay no taxes, I am saying that they should be much lower—as they would be, if the government abided by the Constitution and allowed the free market system to flourish.

And it is important to remember what makes the free market work. Is it a desire we all have to do good for others? Do people in New York enjoy fresh steak for dinner at their favorite restaurant because cattle ranchers in Texas love to make New Yorkers happy? Of course not. It is in the interest of Texas ranchers to provide the steak. They benefit themselves and their families by doing so. This is the kind of enlightened self-interest discussed by Adam Smith in his Wealth of Nations, in which he argues that the social good is best served by pursuing private interests. The same principle explains why I take better care of my property than the government would. It explains as well why a large transfer or estate tax weakens the incentive a property owner has to care for his property and pass it along to his children in the best possible condition. It explains, in general, why free enterprise leads to prosperity.

Ironically, the free market system is threatened today not because of its failure, but because of its success. Capitalism has done so well in eliminating the traditional problems of mankind—disease, pestilence, gross hunger, and poverty—that other human problems seem to us unacceptable. So in the name of equalizing income, achieving sex and race balance, guaranteeing housing and medical care, protecting consumers, and conserving energy—just to name a few prominent causes of liberal government these days—individual liberty has become of secondary or tertiary concern.

Imagine what would happen if I wrote a letter to Congress and informed its members that, because I am fully capable of taking care of my own retirement needs, I respectfully request that they stop taking money out of my paycheck for Social Security. Such a letter would be greeted with contempt. But is there any difference between being forced to save for retirement and being forced to save for housing or for my child’s education or for any other perceived good? None whatsoever. Yet for government to force us to do such things is to treat us as children rather than as rational citizens in possession of equal and inalienable natural rights.

We do not yet live under a tyranny, of course. Nor is one imminent. But a series of steps, whether small or large, tending toward a certain destination will eventually take us there. The philosopher David Hume observed that liberty is seldom lost all at once, but rather bit by bit. Or as my late colleague Leonard Read used to put it, taking liberty from Americans is like cooking a frog: It can’t be done quickly because the frog will feel the heat and escape. But put a frog in cold water and heat it slowly, and by the time the frog grasps the danger, it’s too late.

Again, the primary justification for increasing the size and scale of government at the expense of liberty is that government can achieve what it perceives as good. But government has no resources of its own with which to do so. Congressmen and senators don’t reach into their own pockets to pay for a government program. They reach into yours and mine. Absent Santa Claus or the tooth fairy, the only way government can give one American a dollar in the name of this or that good thing is by taking it from some other American by force. If a private person did the same thing, no matter how admirable the motive, he would be arrested and tried as a thief. That is why I like to call what Congress does, more often than not, “legal theft.” The question we have to ask ourselves is whether there is a moral basis for forcibly taking the rightful property of one person and giving it to another to whom it does not belong. I cannot think of one. Charity is noble and good when it involves reaching into your own pocket. But reaching into someone else’s pocket is wrong.

In a free society, we want the great majority, if not all, of our relationships to be voluntary. I like to explain a voluntary exchange as a kind of non-amorous seduction. Both parties to the exchange feel good in an economic sense. Economists call this a positive sum gain. For example, if I offer my local grocer three dollars for a gallon of milk, implicit in the offer is that we will both be winners. The grocer is better off because he values the three dollars more than the milk, and I am better off because I value the milk more than the three dollars. That is a positive sum gain. Involuntary exchange, by contrast, means that one party gains and the other loses. If I use a gun to steal a gallon of milk, I win and the grocer loses. Economists call this a zero sum gain. And we are like that grocer in most of what Congress does these days.

Some will respond that big government is what the majority of voters want, and that in a democracy the majority rules. But America’s Founders didn’t found a democracy, they founded a republic. The authors of The Federalist Papers, arguing for ratification of the Constitution, showed how pure democracy has led historically to tyranny. Instead, they set up a limited government, with checks and balances, to help ensure that the reason of the people, rather than the selfish passions of a majority, would hold sway. Unaware of the distinction between a democracy and a republic, many today believe that a majority consensus establishes morality. Nothing could be further from the truth.

Another common argument is that we need big government to protect the little guy from corporate giants. But a corporation can’t pick a consumer’s pocket. The consumer must voluntarily pay money for the corporation’s product. It is big government, not corporations, that have the power to take our money by force. I should also point out that private business can force us to pay them by employing government. To see this happening, just look at the automobile industry or at most corporate farmers today. If General Motors or a corporate farm is having trouble, they can ask me for help, and I may or may not choose to help. But if they ask government to help and an IRS agent shows up at my door demanding money, I have no choice but to hand it over. It is big government that the little guy needs protection against, not big business. And the only protection available is in the Constitution and the ballot box.

Speaking of the ballot box, we can blame politicians to some extent for the trampling of our liberty. But the bulk of the blame lies with us voters, because politicians are often doing what we elect them to do. The sad truth is that we elect them for the specific purpose of taking the property of other Americans and giving it to us. Many manufacturers think that the government owes them a protective tariff to keep out foreign goods, resulting in artificially higher prices for consumers. Many farmers think the government owes them a crop subsidy, which raises the price of food. Organized labor thinks government should protect their jobs from non-union competition. And so on. We could even consider many college professors, who love to secure government grants to study poverty and then meet at hotels in Miami during the winter to talk about poor people. All of these—and hundreds of other similar demands on government that I could cite—represent involuntary exchanges and diminish our freedom.

This reminds me of a lunch I had a number of years ago with my friend Jesse Helms, the late Senator from North Carolina. He knew that I was critical of farm subsidies, and he said he agreed with me 100 percent. But he wondered how a Senator from North Carolina could possibly vote against them. If he did so, his fellow North Carolinians would dump him and elect somebody worse in his place. And I remember wondering at the time if it is reasonable to ask a politician to commit political suicide for the sake of principle. The fact is that it’s unreasonable of us to expect even principled politicians to vote against things like crop subsidies and stand up for the Constitution. This presents us with a challenge. It’s up to us to ensure that it’s in our representatives’ interest to stand up for constitutional government.

Americans have never done the wrong thing for a long time, but if we’re not going to go down the tubes as a great nation, we must get about changing things while we still have the liberty to do so.

Crafty_Dog

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Money is social media
« Reply #513 on: December 27, 2020, 09:37:00 AM »
In the process of giving this a proper read:

https://reason.com/2020/12/24/money-is-social-media/

ccp

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Clair Patterson
« Reply #514 on: December 27, 2020, 05:23:55 PM »
never heard of him
interesting story

especially since my grandfather worked at standard oil  - don't know when born 1880s and died 1970s
but early 1900s I guess  in the Bayway NJ
my father did some consulting there in 70s

these stacks where the gasses are burned off are famous along NJ turnpike and US Rt. 1 :

https://www.google.com/maps/uv?pb=!1s0x89c3b2d943daf969%3A0x91e5777841507c2c!3m1!7e115!4shttps%3A%2F%2Flh5.googleusercontent.com%2Fp%2FAF1QipNlUAXl7OYIy-GZlJwF83iuU8Mdsx8eEZq6IGQx%3Dw213-h160-k-no!5sbayway%20refinery%20nj%20exxon%20-%20Google%20Search!15sCgIgAQ&imagekey=!1e10!2sAF1QipNlUAXl7OYIy-GZlJwF83iuU8Mdsx8eEZq6IGQx&hl=en&sa=X&ved=2ahUKEwiV8_HNwe_tAhXiQd8KHakpA6cQoiowCnoECBQQAw

I used to be able to see the burn off from my bedroom window in Elizabeth as child
Occasionally we would get these very noxious odors


Crafty_Dog

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Re: Economics
« Reply #515 on: December 28, 2020, 12:57:08 PM »
As a child growing up in NYC who visited my father every other weekend in Philadelphia, being driven to and from Philly was a part of the experience so I too remember the burn off and the smell.

DougMacG

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Re: Economics, Thomas Sowell, Inequality, uncommon knowledge
« Reply #516 on: December 29, 2020, 08:55:21 AM »
Please spread the wisdom of Thomas Sowell to more voters and more generations. Search Thomas Sowell books, Thomas Sowell interviews. This one I think is from 2010.  All of it is still vitally relevant today.

https://youtu.be/cdBn7MUM3Yo

DougMacG

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Re: Economics, Policies have consequences
« Reply #517 on: January 03, 2021, 06:54:54 AM »
Info from urban issues thread, let us not kid ourselves, what is happening here is the long term consequence of long term economic policies.

Chicago ends 2020 with 769 homicides as gun violence surges

https://apnews.com/article/homicide-chicago-violence-coronavirus-pandemic-gun-violence-be4b972267e31358dd165925d5a33cce

Policies have consequences. Our policies decimated the family. Our policies since the beginning of the so called war on poverty systematically left these young males out of the culture of personal and family responsibilities.

DougMacG

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Economics, Entrepreneurs make the rest of us richer
« Reply #518 on: January 03, 2021, 07:13:35 AM »
https://danieljmitchell.wordpress.com/2021/01/02/successful-entrepreneurs-make-the-rest-of-us-richer/ 

https://www.nber.org/papers/w10433

"producers only capture a tiny slice of the wealth they create for society"

Professor Nordhaus won the Nobel Prize for his work on climate change, is affiliated with the Brookings Institution, and he supports a carbon tax. So he’s not some fire-breathing libertarian with a mission of defending capitalism.

He simply crunched the data and found innovators produce far more wealth for society than they do for themselves.

https://www.aier.org/article/capitalists-get-rich-but-consumers-capture-the-benefits/

"each innovator would surely like to capture a much larger share than 2.2 percent, the robust forces of market competition oblige even the most successful of innovators to give the bulk of the benefits of their innovations to strangers in the form of price cuts, expanded outputs, and improved quality."


DougMacG

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Re: Economics, Profit vs non profit
« Reply #519 on: January 03, 2021, 06:12:07 PM »
"The absence of a bottom line doesn’t reduce greed and self-dealing — it removes a constraint on greed and self-dealing."
   - Prof Glenn Reynolds

http://www.usatoday.com/story/opinion/2014/06/02/shinseki-retire-va-scandal-veterans-health-care-obama-column/9838541/


Greed is always with us. The question is whether greed is channeled in productive ways. In a free market, greedy people can only become rich by providing the rest of us with valuable goods and services.

In statist systems, by contrast, greedy people manipulate coercive government policies in order to obtain unearned wealth.
    - Dan Mitchell
https://danieljmitchell.wordpress.com/2014/06/03/be-thankful-for-capitalism-and-rich-entrepreneurs/

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Economics, India, Israel and UK tried socialism after WWII and it failed
« Reply #520 on: January 18, 2021, 02:15:21 PM »
https://www.heritage.org/progressivism/commentary/three-nations-tried-socialism-and-rejected-it

Socialists are fond of saying that socialism has never been tried. But in truth, socialism has failed in every country in which it has been tried, from the Soviet Union beginning a century ago to three modern countries that tried but ultimately rejected socialism—Israel, India, and the United Kingdom.

While there were major political differences between the totalitarian rule of the Soviets and the democratic politics of Israel, India, and the U.K., all three of the latter countries adhered to socialist principles, nationalizing their major industries and placing economic decision-making in the hands of the government.
...
Israel, India, and the United Kingdom all adopted socialism as an economic model following World War II. The preamble to India’s constitution, for example, begins, “We, the People of India, having solemnly resolved to constitute India into a Sovereign Socialist Secular Democratic Republic . . .” The original settlers of Israel were East European Jews of the Left who sought and built a socialist society. As soon as the guns of World War II fell silent, Britain’s Labour Party nationalized every major industry and acceded to every socialist demand of the unions.

At first, socialism seemed to work in these vastly dissimilar countries. For the first two decades of its existence, Israel’s economy grew at an annual rate of more than 10 percent, leading many to term Israel an “economic miracle.” The average GDP growth rate of India from its founding in 1947 into the 1970s was 3.5 percent, placing India among the more prosperous developing nations. GDP growth in Great Britain averaged 3 percent from 1950 to 1965, along with a 40 percent rise in average real wages, enabling Britain to become one of the world’s more affluent countries.

But the government planners were unable to keep pace with increasing population and overseas competition. After decades of ever declining economic growth and ever rising unemployment, all three countries abandoned socialism and turned toward capitalism and the free market. The resulting prosperity in Israel, India, and the U.K. vindicated free-marketers who had predicted that socialism would inevitably fail to deliver the goods.
« Last Edit: January 18, 2021, 02:16:54 PM by DougMacG »

DougMacG

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Re: Economics, Germany 1940s, China now
« Reply #521 on: January 22, 2021, 07:44:00 AM »
“Crafting the right response to China’s unrepentant “innovation mercantilism” is difficult because it appears the free world has never faced such an adversary before. But in fact, the free world has faced such an adversary: Germany for the first forty-five years of the twentieth century. As noted development economist Albert O. Hirschman wrote in 1941, Germany was neither a free trader nor a protectionist. It was a “power trader” that used trade as a key tool to gain commercial and military advantage over its adversaries. Likewise, China’s trade policy is guided neither by free trade nor protectionism, but by power trade, with remarkably similar strategy and tactics to those of 1940s Germany. Understanding how Germany manipulated the global trading system to degrade its adversaries’ capabilities, entrap nations as reluctant allies, and build up its own industries for commercial and military advantage, just as China is doing, can shed light and point the way for solutions to the China challenge.”  itif.org, international-economy.com
« Last Edit: January 22, 2021, 07:54:44 AM by DougMacG »

Crafty_Dog

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Re: Economics
« Reply #522 on: January 23, 2021, 11:06:37 AM »
That resonated rather strongly for me.

DougMacG

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Demand Side Economics
« Reply #523 on: February 08, 2021, 08:09:30 AM »
Speaking of Supply Side Economics, George Schultz: "the best stimulus of an ailing economy is almost always to reduce the tax and regulatory burdens weighing it down."

Let's take a look at Demand Side Economics, proven failed but Democrats are still trying to pump another $1.9 trillion into it.

FDR's Treasury Secretary, 1939, see below: "We have tried spending money. We are spending more money than we have ever spent before and it does not work."

Keynesianism and the The New Deal were all about demand side economics.  The book on it might be called, how to take a run of the mill downturn and make it last forever, or at least until a world war snaps us out of it.  Take a look:


https://mailchi.mp/8b203ad12729/unleash-prosperity-hotline-862590?e=17d44a0477
-------------------------------------------------------
Contrast with supply side and eight years of the Reagan Administration:

20 million new jobs were created
Inflation dropped from 13.5% in 1980 to 4.1% by 1988
Unemployment fell from 7.6% to 5.5%
Net worth of families earning between $20,000 and $50,000 annually grew by 27%
Real gross national product rose 26%
The prime interest rate was slashed by more than half, from an unprecedented 21.5% in January 1981 to 10% in August 1988
https://www.reaganfoundation.org/ronald-reagan/the-presidency/economic-policy/
History repeats itself - on way or the other.
---------------------------------------------------------------
Back to FDR's New Deal and admittedly failed Demand Side Economics:

Henry Morgenthau, Jr. was FDR’s Secretary of the Treasury from 1934-1945. In the following important quote, he admits that the big New Deal stimulus spending programs had failed.

(p. 2) We have tried spending money. We are spending more money than we have ever spent before and it does not work. And I have just none interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job, I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!

Source:
Folsom, Burton W., Jr. In New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. 4th ed. New York: Threshold Editions, 2008.
(Note: ellipses in Folsum’s version of the quotation.)

Folsum says that this statement was from testimony before the House Ways and Means Committee in May 1939; and can be found in Morgenthau’s Diary entry for May 9, 1939 at the Roosevelt Presidential Library.

« Last Edit: February 08, 2021, 08:16:25 AM by DougMacG »

DougMacG

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Economics, how free enterprise delivers prosperity for the masses
« Reply #524 on: February 10, 2021, 12:29:05 PM »
https://www.youtube.com/watch?v=J_Bzw8W1rS8&feature=emb_logo

This is a great video about how free enterprise delivers prosperity for the masses.

And because wealthy societies have lots of financial resources, capitalism also is correlated with good outcomes such as reduced pollution and increased literacy.

Hannan makes three key points in his video.

First, he makes the should-be-obvious case that it’s possible for all groups in a society to become richer if the economic pie expands. I’ve shown this with U.S. data and I’ve shown it with global data.
Second, he echoes the great insight of the late Walter Williams by pointing out that you get rich under capitalism by serving others. In government-controlled economies, by contrast, you get rich by stealing from others.
Third, he cites Joseph Schumpeter’s sage observation about how capitalism makes life better for ordinary people. That’s never happens in government-controlled economies.
Indeed, the only possible shortcoming in the video is that it truncates Schumpeter’s quote.

As you can see below, it’s not just that free enterprise makes goods available for those at the bottom, it does so in a way that is increasingly affordable over time



https://danieljmitchell.wordpress.com/

DougMacG

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Economics, Walter Williams quotes
« Reply #525 on: February 10, 2021, 08:40:45 PM »
Walter Williams On Property, Rights and Justice
1. My definition of social justice: I keep what I earn and you keep what you earn. Do you disagree?...how much of what I earn belongs to you--and why?

2. If one person has a right to something he did not earn, of necessity it requires that another person not have a right to something that he did earn.

3. Nothing in our Constitution suggests that government is a grantor of rights. Instead, government is a protector of rights.

4. There is no moral argument that justifies using the coercive powers of government to force one person to bear the expense of taking care of another.

5. Government has no resources of its own…government spending is no less than the confiscation of one person’s property to give it to another to whom it does not belong.

6. We don’t have a natural right to take the property of one person to give to another; therefore, we cannot legitimately delegate such authority to government.

7. Exercise of a right by one person does not diminish those held by another.

8. No matter how worthy the cause, it is robbery, theft, and injustice to confiscate the property of one person and give it to another to whom it does not belong.

9. The better I serve my fellow man…the greater my claim on the goods my fellow man produces. That’s the morality of the market.

10. The act of reaching into one’s own pockets to help a fellow man in need is praiseworthy and laudable. Reaching into someone else’s pocket is despicable.

Liberty versus Coercion
Government is about coercion. Limiting government is the single most important instrument for guaranteeing liberty.

Democracy is little more than mob rule, while liberty refers to the sovereignty of the individual.

The true test of one’s commitment to liberty and private property rights…comes when we permit people to be free to do those voluntary things with which we disagree.

In a free society, government has the responsibility of protecting us from others, but not from ourselves.

The essence of government is force, and most often that force is used to accomplish evil ends.

Economic planning is nothing more than the forcible superseding of other people’s plans by the powerful elite backed up by the brute force of government.

If we buy into the notion that somehow property rights are less important, or are in conflict with, human or civil rights, we give the socialists a freer hand to attack our property.

Substituting democratic decision making for what should be private decision-making is nothing less than tyranny dressed up.

It’s government people, not rich people, who have the power to coerce and make our lives miserable.

The moral tragedy that has befallen Americans is our belief that it is okay for government to forcibly use one American to serve the purposes of another–that in my book is a working definition of slavery.

Protecting our Rights and Liberties
Always be suspicious of those who…claim their way is the best way and are willing to force their way on the rest of us.

People who denounce the free market and voluntary exchange…are for control and coercion.

Economic planning is nothing more than the forcible superseding of other people’s plans by the powerful elite backed up by the brute force of government.

Politicians have immense power to do harm to the economy. But they have very little power to do good.

What our nation needs is a separation of “business and state”…That would mean crony capitalism and crony socialism could not survive.

The best good thing that politicians can do for the economy is to stop doing bad. In part, this can be achieved through reducing taxes and economic regulation, and staying out of our lives.

If we care about our remaining liberties we must at some point …let politicians and bureaucrats know we will not tolerate further encroachment on our God-given rights to liberty.

The public good is promoted best by people pursuing their own private interests.
Most of the great problems we face are caused by politicians creating solutions to problems they created in the first place.

If we’re ignorant, we won’t even know when government infringes on our liberties. Moreover, we’ll happily cast our votes for those who’d destroy our liberties.

Walter Williams had a great deal of wisdom to offer, and he passed that wisdom on to many. But there are many more of us who could still benefit from it.

DougMacG

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Economics, The Mercatus Center at George Mason University
« Reply #526 on: February 13, 2021, 10:11:20 AM »
The Mercatus Center at George Mason University is the world's premier university source for market-oriented ideas—bridging the gap between academic research and public policy problems."

https://www.mercatus.org/about


Crafty_Dog

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Re: Economics
« Reply #528 on: February 14, 2021, 07:57:23 PM »
That was pretty long so I just superskimmed it; did I get it correctly that he seems not to distinguish legal and illegal immigration, as well as the issue of the characteristics required for legal immigrants?

DougMacG

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Re: Immigration Economics
« Reply #529 on: February 15, 2021, 05:51:14 PM »
That was pretty long so I just superskimmed it; did I get it correctly that he seems not to distinguish legal and illegal immigration, as well as the issue of the characteristics required for legal immigrants?

You are right, not covered in this article.  To me, immigration only includes legal.  Illegal entry introduces so many other factors, covid for example, gangs, criminals, lack of assimilation, no control of the flow, etc.  Second, there are at lot of reasons we should manage the number rate, backgrounds and origin of legal immigrants. Seeing the labor and capital economics of how immigrants affect wages of native workers and capital flows can help us answer those questions, who should come in, at what rate.  None of that can be done with an open, undocumented, lawless border.

DougMacG

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Re: Economics
« Reply #530 on: February 16, 2021, 08:58:47 PM »
John Childs in the New York Sun:

The first thing to be said about Senator Elizabeth Warren’s plan for a wealth tax is that it attacks one of the pillars of American greatness. It is hard to imagine anything more un-American than an attack on wealth. Accumulation of wealth is central to our right to life, liberty, and the pursuit of happiness. It is the fruit of that uniquely American personality trait — optimism.

That can-do spirit has beaten the odds countless times, including all the Horatio Alger stories that populate American history.

Mrs. Warren’s basic threat is a 2% annual tax on household net worth between $50 million and $1 billion. While 2% might sound low, it adds up over a decade to 20% of the value of the asset in question.

https://mailchi.mp/c8eca0a42c23/unleash-prosperity-hotline-865024?e=17d44a0477
-------------------------------------------------------------

1) It will only affect people with assets over $50 million?  Is Lucy holding the football again?

2) It is a denial of science that hurting only these people won't hurt those people in an interconnected economy.

3) You can't take 20% of asset.  You can only force a sale and take 20% of the proceeds.

We've gone from, "You didn't build that" to "You built it and we're taking it".  It's morally wrong.  Thou shalt not steal.  It's not a 'fair' law that applies to everyone.  The main selling point is that is doesn't.

G M

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Re: Economics
« Reply #531 on: February 16, 2021, 09:09:54 PM »
Doug,

Today's dems give absolutely zero fucks for the concepts of right and wrong, fairness, traditional American beliefs or anything resembling logic.


John Childs in the New York Sun:

The first thing to be said about Senator Elizabeth Warren’s plan for a wealth tax is that it attacks one of the pillars of American greatness. It is hard to imagine anything more un-American than an attack on wealth. Accumulation of wealth is central to our right to life, liberty, and the pursuit of happiness. It is the fruit of that uniquely American personality trait — optimism.

That can-do spirit has beaten the odds countless times, including all the Horatio Alger stories that populate American history.

Mrs. Warren’s basic threat is a 2% annual tax on household net worth between $50 million and $1 billion. While 2% might sound low, it adds up over a decade to 20% of the value of the asset in question.

https://mailchi.mp/c8eca0a42c23/unleash-prosperity-hotline-865024?e=17d44a0477
-------------------------------------------------------------

1) It will only affect people with assets over $50 million?  Is Lucy holding the football again?

2) It is a denial of science that hurting only these people won't hurt those people in an interconnected economy.

3) You can't take 20% of asset.  You can only force a sale and take 20% of the proceeds.

We've gone from, "You didn't build that" to "You built it and we're taking it".  It's morally wrong.  Thou shalt not steal.  It's not a 'fair' law that applies to everyone.  The main selling point is that is doesn't.

DougMacG

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Re: Economics
« Reply #532 on: February 17, 2021, 06:07:45 AM »
I prefer the efficiency argument in taxation, but sometimes it's necessary to at least point out the obvious distinctions of right versus wrong.

Tearing down companies from the successful people who built them, for the sin of being successful, isn't in anyone's best interest.

Problem is that we don't teach the good of capital and capitalism.  It is thought of as a (zero-sum) lottery; you took some payment from all these people and gave it to the few, and the truth couldn't be any more the opposite.  The innovator on average keeps 2% of the wealth he or she helped to create, and everyone around them benefits, customers, suppliers, employees plus the positive multiplier effect that radiates outward from all of them.  Labor without capital is nearly worthless.  The most recent tax rate reductions helped the incomes of working people more than anyone else, even though they seemed to target businesses, meaning employers.

I want to pick off the honest Democrat voters, one by one.  How long can each one handle the contradiction that their chosen for now political economic choices are built on a foundation of dishonesty?

Doug,

Today's dems give absolutely zero fucks for the concepts of right and wrong, fairness, traditional American beliefs or anything resembling logic.


John Childs in the New York Sun:

The first thing to be said about Senator Elizabeth Warren’s plan for a wealth tax is that it attacks one of the pillars of American greatness. It is hard to imagine anything more un-American than an attack on wealth. Accumulation of wealth is central to our right to life, liberty, and the pursuit of happiness. It is the fruit of that uniquely American personality trait — optimism.

That can-do spirit has beaten the odds countless times, including all the Horatio Alger stories that populate American history.

Mrs. Warren’s basic threat is a 2% annual tax on household net worth between $50 million and $1 billion. While 2% might sound low, it adds up over a decade to 20% of the value of the asset in question.

https://mailchi.mp/c8eca0a42c23/unleash-prosperity-hotline-865024?e=17d44a0477
-------------------------------------------------------------

1) It will only affect people with assets over $50 million?  Is Lucy holding the football again?

2) It is a denial of science that hurting only these people won't hurt those people in an interconnected economy.

3) You can't take 20% of asset.  You can only force a sale and take 20% of the proceeds.

We've gone from, "You didn't build that" to "You built it and we're taking it".  It's morally wrong.  Thou shalt not steal.  It's not a 'fair' law that applies to everyone.  The main selling point is that is doesn't.

G M

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Re: Economics
« Reply #533 on: February 17, 2021, 11:50:01 AM »
Let me know when you convince one you know personally.


I prefer the efficiency argument in taxation, but sometimes it's necessary to at least point out the obvious distinctions of right versus wrong.

Tearing down companies from the successful people who built them, for the sin of being successful, isn't in anyone's best interest.

Problem is that we don't teach the good of capital and capitalism.  It is thought of as a (zero-sum) lottery; you took some payment from all these people and gave it to the few, and the truth couldn't be any more the opposite.  The innovator on average keeps 2% of the wealth he or she helped to create, and everyone around them benefits, customers, suppliers, employees plus the positive multiplier effect that radiates outward from all of them.  Labor without capital is nearly worthless.  The most recent tax rate reductions helped the incomes of working people more than anyone else, even though they seemed to target businesses, meaning employers.

I want to pick off the honest Democrat voters, one by one.  How long can each one handle the contradiction that their chosen for now political economic choices are built on a foundation of dishonesty?

Doug,

Today's dems give absolutely zero fucks for the concepts of right and wrong, fairness, traditional American beliefs or anything resembling logic.


John Childs in the New York Sun:

The first thing to be said about Senator Elizabeth Warren’s plan for a wealth tax is that it attacks one of the pillars of American greatness. It is hard to imagine anything more un-American than an attack on wealth. Accumulation of wealth is central to our right to life, liberty, and the pursuit of happiness. It is the fruit of that uniquely American personality trait — optimism.

That can-do spirit has beaten the odds countless times, including all the Horatio Alger stories that populate American history.

Mrs. Warren’s basic threat is a 2% annual tax on household net worth between $50 million and $1 billion. While 2% might sound low, it adds up over a decade to 20% of the value of the asset in question.

https://mailchi.mp/c8eca0a42c23/unleash-prosperity-hotline-865024?e=17d44a0477
-------------------------------------------------------------

1) It will only affect people with assets over $50 million?  Is Lucy holding the football again?

2) It is a denial of science that hurting only these people won't hurt those people in an interconnected economy.

3) You can't take 20% of asset.  You can only force a sale and take 20% of the proceeds.

We've gone from, "You didn't build that" to "You built it and we're taking it".  It's morally wrong.  Thou shalt not steal.  It's not a 'fair' law that applies to everyone.  The main selling point is that is doesn't.

Crafty_Dog

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Economics, Jason Riley on Thomas Sowell
« Reply #535 on: March 07, 2021, 11:01:10 AM »

DougMacG

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Economics, Why is increasing debt burden considered a "stimulus"?
« Reply #536 on: March 16, 2021, 07:22:50 AM »
Deniers of Science, economic science.

Source: Alan Reynolds Econ Twitter, Mar 8 2021

Financial Times: "Biden on brink of passing historic $1.9tn boost to US economy" 

Alan Reynolds:  Why is adding $1.9 trillion to taxpayer debt assumed be a boost rather than a burden to factors of production?   Additions to corporate or household debt are not assumed to add to their net worth.
-----------

(Doug). Did the New Deal that kept us in depression for a decade 'stimulate' the economy?  Did shovel ready jobs, Solyndra or cash for clunkers stimulate the economy during the nation's slowest recovery?

Politicians and media lie to us, then pollsters tell us it must be true because most people agree. That is not data based science.

Two trillion in new debt with real interest is a helluva burden - if we intended to pay it back. Since we don't, it is economic damage in untold ways.

At 45,000 per household so far, must ask, did someone else get your share?

Crafty_Dog

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Re: Economics
« Reply #538 on: April 03, 2021, 02:03:26 PM »

DougMacG

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Re: Economics, Robert Mundell (RIP), Nobel laureate
« Reply #539 on: April 05, 2021, 04:56:52 PM »
For more on Robert Mundell, read The Seven Fat Years by Robert Bartley, then Editor of the WSJ.
https://en.wikipedia.org/wiki/Robert_Mundell
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https://www.nysun.com/editorials/robert-mundell/91468/

Robert Mundell
Editorial of The New York Sun | April 5, 2021
Our favorite story about Robert Mundell, the Nobel laureate in economics who at age 88 died Sunday at his villa in Italy, illuminates what a country would do for an hour of his time. It was the late 1980s. We were based in Brussels as an editorial writer for the Wall Street Journal. One day at 7 a.m., our phone rang. It turned out to be Mundell, calling to thank us for mentioning him in that morning’s editorial.

“Gee, Bob,” we said, “it’s 2 a.m. in New York. How’d you get the Journal so early there?” He turned out to be in Geneva and had read it in the Journal’s European edition. Just then, a second line on the phone lit up, and we asked Mundell where he was staying. He said he was in room 306 at the Beau Rivage. We said we’d call him right back, dropped his call, and picked up the other line.

It was Jacques Raiman, adviser to Édouard Balladur, France’s minister of the economy. “By any chance,” Raiman said, “do you know how I could reach Professor Mundell.” Sure, we said, he’s in room 306 of the Beau Rivage in Geneva. Raiman said he wanted to get Mundell on the blower with Balladur. “Splendid,” we said. “Even better, you could bring him up to Paris for lunch.”

Raiman, we later learned, did invite Mundell to coffee with Balladur in the minister’s magnificent office in the Rue Rivoli. Mundell said he absolutely had to be back in Geneva for dinner. He was reassured and told to head to the airport. Soon Balladur gets a call from the Sûreté, saying that an aging hippy was at the Air France check-in at Geneva, lacking a ticket but insisting he had an appointment with the minister.

The hippie, the detective said, was wearing a blazer, blue jeans, and shoulder-length hair. Soon Mundell was seated in the minister’s magnificent office. They had a fine talk, and at 5 p.m., Balladur looked at his watch and said, “I understand I’ve promised to get you back to Geneva for dinner.” A gleaming Renault Vingt-Cinq limousine, motor purring, was waiting in the ministry courtyard.

A liveried officer helped Mundell into the car. Then the vehicle roared into the Rue Rivoli, hauled up the Elysian Fields, and careered around the Arc de Triomphe, and swooped onto the beltway known as the Périphérique — where it stopped cold in the rush-hour traffic jam. In half an hour, they managed a quarter kilometer, but were now at a standstill. An impatient Mundell got out of the car to case the situation.

Suddenly, the Périphérique was enveloped in sirens and blue lights as motorcycle-riding flics swarmed through the traffic jam, slapping the vehicles and ordering them to pull over. Mundell scampered back into his car. “C’est pour vous!” his driver exclaimed, throwing the Vingt-Cinq into gear and swerving into a left lane that was now empty. Balladur had cleared the highway to Charles de Gaulle airport so the professor could catch his plane.

We don’t know what happened in Balladur’s meeting with Mundell. Was that when he clinched his idea for the euro, of which the economist would become known as the father? He’d already written “A Plan for a European Currency.” The euro, in any event, made its debut a few years later. Dayenu, we say. The amazing thing is that the euro was but one of Mundell’s astounding projects.

Mundell had already played a leading role in developing the economic strategy — high interest rates combined with supply-side tax cuts — that were so central to defeating the stagflation of the 1970s and enabling the Reagan boom. Mundell would go on to advise the central bank of China, which he had foreseen would emerge as an economic power. He launched the Nobel Laureates Beijing Forum.

Mundell inspirited and emboldened thousands of economists and students. In 1999, when Mundell won his Nobel, he invited the editor of the Wall Street Journal, Bob Bartley, who’d backed him through thick and thin, to join him in Stockholm. Economist Judy Shelton tells of how he reacted to a setback in her early career by inviting her to a conference on the coast, where he seated her between Paul Samuelson and James Tobin.

One of great economist’s tools was a villa in the glorious Tuscan Hills of Italy. He’d purchased the estate, we’re told, as a hedge against inflation. There he and his wife, Valerie, welcomed over the years what must be hundreds of economists, business leaders, politicians, and newspapermen in a running seminar on monetary reform that those who attended will never forget.

Early today from Santa Columba, Valerie cabled friends that she, their son Nicholas, and an aide had on a lovely day last week taken Mundell down to the garden “where the tulips, narcissi and hyacinths were starting to bloom and the trees were starting to bud.” Trailed by their dogs, the economist “kept repeating beautiful, beautiful and then fell asleep in the sun.” Back at the villa, “he slept continuously and peacefully — joined on the bed by our two cats” until he took Sunday the last breaths of one of the great lives of our time.


DougMacG

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Marxism and free markets in Soviet history
« Reply #540 on: April 12, 2021, 08:57:40 AM »
I wonder if the pretend advocates of pretend Marxism like the BLM co-founder, who just bought the million dollar compound in LA, ever studied the real world attempts at Marxism that all ended in miserable failure.  Take a look back at the Soviet Union and 'war communism', 1917-1921:

https://fee.org/articles/that-time-the-soviet-union-grudgingly-turned-to-free-markets-to-save-its-collapsing-economy/

"On May 9, 1918, a grain monopoly was announced over grain production in the country. All grain harvested across the country was now the property of the state."
...
"from 1909-1913, gross agricultural output averaged 69 million tons. By 1921, it was just 31 million. From 1909-1913, sown area was over 224 million acres. In 1921, only 158 million acres were sown. This lack of food resulted in a mass loss of population. From 1917 to 1922, the entire population declined by 16 million, not counting immigration and deaths from the civil war."

[Doug]  Don't you think death of 16 million by unnecessary starvation is a particularly slow and grewsome way to go?  The recent human tragedy in Venezuela had already been tried elsewhere.  With all we've learned,  why do we want this here?

More from the article:  After a meeting of the Tenth Party Congress in March, a new set of economic programs was agreed upon. These changes would come to be known as the NEP, or New Economic Policy. The general levy on food was rescinded, allowing peasants to keep the surplus of their harvest and sell it on the market for their own gain. Small businesses would be allowed to operate once more. All systems of rationing were dismantled and money returned into the economy to facilitate exchange. Even though large parts of industry were still controlled by the state, the totalitarian control of War Communism had been rejected in favor of private enterprise and free markets.

“The restoration of the market brought life back to the Soviet economy. Private trade responded instantly to the chronic shortages that had built up over seven years of war, revolution, and the Civil War. By 1921, everyone was living in patched-up clothes and shoes, cooking with broken utensils. People set up booths and stalls; flea-markets flourished; peasants sold their foodstuffs in town markets; and “bagging” to and from the countryside once again became a mass phenomenon. Licensed by new laws, private cafes, shops, and restaurants, even small-scale manufacturers appeared like mushrooms after the rain. Foreign observers were astounded by the transformation.”

There was an almost immediate recovery of the Soviet economy. Where there once was empty shelves and empty stomachs, ample food and manufactured goods were now available for purchase. The constant shortages that had marked War Communism were replaced with businesses flushed with products to sell.

The Legacy of War Communism
What went wrong? The Bolshevik leaders had their own ideas about why their Communist utopia had failed to arrive. Lenin claimed that “state capitalism” was a necessary stage before communism could be achieved. Before all property and exchange could be discarded for good, a “mixed-economy” was first necessary. A convenient explanation for the failures of the state planning, no doubt. Some right-leaning figures in Moscow, such as Bukharin, became more favorable to the idea of private enterprise and embraced the NEP as being the ideal system, as opposed to a temporary necessity. Others, such as Stalin, saw the NEP as a mistake, and a return to state planning would work if given enough time.

Even if the Bolsheviks were divided on why War Communism failed, economics gives us a clear answer as to why central planning of an economy cannot work. It is because central planning cannot transfer information in the same way that markets can. Knowledge about the relative scarcity or abundance of any particular good or resource can be easily transmitted via prices.
« Last Edit: April 12, 2021, 09:01:11 AM by DougMacG »

DougMacG

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What Supply-Side Economics Means, Alan Reynolds, Mundell, Bartley, Wanniski
« Reply #541 on: April 12, 2021, 10:47:51 AM »


https://www.creators.com/read/alan-reynolds/04/07/what-supply-side-economics-means

What Supply-Side Economics Means
By Alan Reynolds
April 25, 2007  8 Min Read

In "The Seven Fat Years," Robert Bartley, the legendary former editor of The Wall Street Journal, wrote: "On March 26, 1976 Herb Stein coined a label, the 'supply-side fiscalists,' telling a conference at the Homestead Resort in Virginia that it consisted of 'maybe two' economists. Alan Reynolds passed this along to Jude (Wanniski), who promptly appropriated the label, though dropping 'fiscalists' as awkward and misleading." The label was new, but the basic concepts had been explained in Wanniski's Journal article of Dec. 11, 1974, "It's Time to Cut Taxes."

In 1977, Bruce Bartlett went to work for Jack Kemp, the congressional quarterback for what eventually became President Reagan's first round of tax rate reductions.

In a recent New York Times article, Bruce wrote: "I think it is long past time that the phrase (supply-side economics) be put to rest. ... It has become a frequently misleading and meaningless buzzword that gets in the way of good economic policy. Today, supply-side economics has become associated with an obsession for cutting taxes under any and all circumstances. No longer do its advocates in Congress and elsewhere confine themselves to cutting marginal tax rates — the tax on each additional dollar earned — as the original supply-siders did. Rather, they support even the most gimmicky, economically dubious tax cuts with the same intensity. ... Today, it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue."

Labels aside, those remarks are nothing new. In a July 2004 column, Bartlett correctly remarked that, "The vast bulk of tax cuts since 2001, in revenue terms, have gone for tax rebates, kiddy credits and other measures having no impact on marginal incentives."

Of course such "gimmicky tax cuts" lose tax revenue. But Wall Street Journal columnist Robert Frank, writing on economist Greg Mankiw's blog, recently imagined he had witnessed "the supply-sider Bruce Bartlett now conceding that tax cuts for top earners don't boost total tax revenues." Bartlett conceded no such thing. Revenues have risen impressively since the 2003 reduction of tax rates, and nearly all of the gains are from top earners, including profits, capital gains and dividends.

In 2004, Bartlett wrote that "with federal revenues at just 15.8 percent of gross domestic product (GDP) — well below their historical level of 18 percent — I don't think our economy is overtaxed." The Congressional Budget Office now estimates federal revenues of 18.6 percent of GDP this year and 19 percent next year.

Phrases intended to describe complex ideas in a word or two, such as Keynesian or monetarist, invariably become misused or hijacked after three decades. But such semantic abuses can't be halted by Bartlett's white flag. Like it or not, the phrase "supply-side economics" will doubtless continue to be used and abused.

Bartlett says, "The context in which the term had meaning no longer exists, and therefore it has become a barrier to communication." That context refers to a debate about the appropriate "policy mix" in a situation of double-digit inflation combined with severe recession, as in 1974-75 or 1980-82. The supply-side innovation, from Nobel Laureate Bob Mundell, was to suggest that (1) monetary policy is the right tool to keep inflation in check, and that (2) the focus of tax policy should be shifted from short-term accounting results (deficits) toward improving longer-term incentives for productive work and investment. The first part of that package is actually monetarist, and neither part ever ceases to be relevant to inflation and economic growth, respectively.

I wrote a paper on "The Fiscal-Monetary Policy Mix" for the Fall 2001 Cato Journal. It began by saying: "In the early postwar years, during the heyday of fiscal fine-tuning ... the predominant view was that the main function of monetary policy was to 'stimulate' debt-financed purchases by keeping interest rates low. Inflation was first considered a useful lubricant to be traded for lower unemployment, and inflation could be reduced only by tolerating high unemployment. In the late '60s and early '70s, when the shrinking dollar proved less popular than expected, inflation was routinely described by a thermal metaphor ('overheating') and regarded as an endemic problem to be endlessly 'fought' by using fiscal policy (a surtax) and incomes policy (wage-price controls), but never monetary policy."

The context of my remarks was the conventional unwisdom that gave us LBJ's surtax in 1968 and Nixon's price controls in 1971. In a blog commenting on Bartlett's piece, New York Times columnist Paul Krugman was irritated by Bartlett's comment that "Keynesians of that era" thought "monetary policy is impotent and inflation is caused by low unemployment." Krugman replied: "I was a grad student at MIT — the great Keynesian stronghold — in the 1970s, and this bears no resemblance to what was being taught. In fact, I still have my copy of Dornbusch-Fischer, 'Macroeconomics,' the 1978 edition — and it doesn't make any of those assertions."

By 1978, however, supply-side ideas were even getting attention in textbooks. In the 1978 edition of Campbell McConnell's best-selling "Economics" text, the "Last Word" on fiscal policy was a paper of mine that is still online at taxfoundation.org. The 1978 Dornbusch-Fischer text found supply-side tax policy "intriguing" and thought we may well need "fiscal policies that operate on aggregate supply."

Bartlett says: "I still think (supply-side economics) was the right cure for the economic problems we were facing in the late 1970s. I also think it embodies some fundamental truths that are applicable at all times. But these fundamental truths, such as the idea that high marginal tax rates are bad for the economy, are now almost universally accepted." That is almost true. Mainstream economics almost universally accepts "optimal tax theory" and the "elasticity of taxable income" — elegant elaborations of original supply-side themes. If incentives didn't matter, then we might as well discard the word "economics," not just supply-side (incentive-based) microeconomics.

Greg Mankiw is a "new Keynesian" scholar who thinks tax incentives matter a lot. Ed Prescott is a "real business cycle" scholar who thinks tax incentives matter even more. But Mankiw, Prescott, Martin Feldstein and others still quarrel with their retrograde peers. Being "almost universally accepted" is almost good enough, but not quite. When tax policy in most countries is as close to optimal as Hong Kong's, I will gladly stop mentioning supply-side economics.

DougMacG

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Re: Economics, minimum wage law cuts the rung off the ladder
« Reply #542 on: April 19, 2021, 07:00:41 AM »
https://fee.org/articles/dirty-jobs-star-mike-rowe-just-totally-debunked-the-argument-for-a-15-minimum-wage/

“There is a ladder of success that people climb,” he continued. “Some of those jobs that are out there for seven, eight, nine dollars an hour, in my view, they're simply not intended to be careers. They're not intended to be full-time jobs. They're rungs on a ladder."

"[Those jobs] are ways for people to get experience in the workforce doing a thing that might not necessarily pay you as much as you'd like, but nevertheless serves a real purpose," Rowe added. "I worry that the path to a skilled trade can be compromised when you offer an artificially high wage for, I hate the expression, but an unskilled job.”

ccp

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CPI
« Reply #543 on: April 30, 2021, 02:36:39 PM »
"less energy and food" in small print:

https://www.bls.gov/cpi/

ccp

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inflation going up beyond point of no return
« Reply #544 on: June 17, 2021, 03:42:44 PM »
https://thehill.com/opinion/finance/558555-biden-approaches-economic-point-of-no-return

total silence from MSM

Was it on Levin show where one economist said if we measure CPI in 1970s terms rather then today CPI we are already in double digit inflation

funny how numbers get distorted and played with and jumbled to make pols look better

DougMacG

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Re: Economics, income distribution trends, 2007-2016
« Reply #545 on: July 29, 2021, 05:00:14 PM »
https://www.bea.gov/system/files/papers/WP2019-1_0.pdf

"Over the period, compensation has decreased as a share of household income over
time, while transfers have increased proportionally. These trends are seen most strongly in the bottom quintiles. Fourth, real mean and median income have increased over the period, with gains made by every income quintile. Finally, the effects of the Great Recession and subsequent gradual recovery can be seen very clearly to be affecting all income categories.
We view this exercise as an important step in furthering the discussion not only on inequality statistics, but also on working to close the often-cited “macro-micro” gap which
exists in estimates of income distributions."


DougMacG

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Re: Economics, 50 years ago, Art Laffer
« Reply #546 on: August 14, 2021, 04:39:52 AM »
https://www.nysun.com/national/beyond-bretton-woods-it-was-as-close-to-economic/91617/

Turning point meeting, Friday the 13th, August 1971.  Also see this chapter in Robert Bartley's Seven Fat Years.  We went off of the Bretton Woods gold-based monetary system and implemented price wage controls when inflation hit 7%. By the end of the decade, inflation was double-digit.  In a short column he also covers the main mistakes of the Great Depression. 

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« Last Edit: August 29, 2021, 04:52:09 AM by DougMacG »

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« Last Edit: October 02, 2021, 06:37:42 PM by DougMacG »