Category Archives: Economics

Business, Economics, Political Commentary

The Rich

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…have options:

Leaving aside the morality of abridging property rights based on income level, and the meaningless puddle this practice has melted our Constitution into, it seems reasonable to conclude there is a sweet spot on the Laffer curve: a point at which tax and regulatory burdens are low enough to encourage the most growth-oriented behavior from wealthy individuals and large corporations, but high enough to generate the income necessary to fund government without running huge deficits. The government must, in turn, live within its means. It must be small enough to survive on the funding provided by this optimum rate of taxation. Obviously, our current federal government has swollen far beyond this size, becoming a tumor that murders its host organism with increasingly frantic demands for greater nourishment.

Soak-the-rich policies are dismal failures, because they rely on controlling the behavior of people who have many options to escape. The promises of such systems depend on capturing extremely agile dollars. Those of us with fewer options, and less liquid income, always end up suffering the fallout from these failures. We live the dusty spaces left behind when billionaires decide not to follow the scripts prepared for them by Washington social engineers.

Unfortunately, the country is being run by economic ignorami. At least for another few months.

Business, Economics, Media Criticism, Political Commentary

The Parasite Has Been Growing

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…while the host has been losing weight:

[Rasmussen] asked likely voters — his usual sample, which tilts more Republican than all adults — whether increased government spending is good or bad for the economy.

The results were unambiguous. Good for the country? 28 percent. Bad for the country? 52 percent.

He got similar results when he asked whether increasing the federal debt is good or bad for the economy. Likely voters believe it’s bad for the economy by a 56 percent to 17 percent margin.

There is some dissent, from the voters Rasmussen labels the Political Class. These are voters who trust the judgment of America’s political leaders over that of the American people, who do not believe the federal government has become a special interest group and who don’t believe government and big business work together in ways that hurt consumers and investors.

In other words, they’re the people the New York Times’ David Brooks refers to as “the educated class.” Or those voters in Cambridge and Brookline who stuck with the Democratic nominee in the special Senate election last January.

Around here, we refer to them as the parasitic idiot class. And David Brooks is at the head of the class.

[Update a couple minutes later]

This seems related: thoughts on the academic/industrial complex. I wonder if it will survive the bursting of the academic bubble?

[Update a while later]

Gee, this seems related, too. Electric car subsidies as handouts for the rich.

And thoughts from Roger Simon on the continuing myth of Democrats as the party of the people:

We live in an era — the worst economically since the Depression — when the daughter of the first couple of the Democratic Party has a multi-million dollar, Marie Antoinette-style wedding with port-a-potties almost as luxurious as a toilette in Baden Baden; it’s self-proclaimed environmental leader, the first global warming billionaire, sprouts “green” McMansions from Nashville to Montecito; and its already multi-billionaire senator from Massachusetts moors his yacht in another state to escape taxes we hoi polloi could only dream of paying.

But wait, as they say, there’s more. At this moment, two of their leaders from a supposedly disadvantaged minority are about to be tried for ethical transgressions (read: thievery) even Congress couldn’t sweep under the rug. Never mind that these transgressions mostly exploit the very minority these people purport to represent. It’s part of the game. Convince minorities they should act like victims. Extort guilt payments from the majority and keep the change. Meanwhile, nothing improves for the minority because it would interrupt the system.

They’re the new Bourbons, of whom it was said that they have learned nothing, and forgotten nothing. But I think they’re in for a big lesson this fall.

Business, Economics, Political Commentary

Zero-Cost Stimulus

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…and a good moratorium:

The fact is that regulation now costs the US economy over $1 trillion a year, according to my colleague Wayne Crews. Every year, Wayne puts together a snapshot of the regulatory state called Ten Thousand Commandments. This year he found that regulation eats up 8.3 percent of the US economy and its cost is equal to 63 percent of corporate pretax profits. The burden of regulation on business dwarfs the burden of the corporate income tax.

So the one year moratorium is probably a good idea, slowing if not halting the regulatory juggernaut. However, we can go further and provide the stimulus the economy provides at zero cost by getting rid of some of this burden. We call this program “Liberate to Stimulate” and some of the measures we suggest are:

• Rather than trying to improve speeds by picking the particular R&D horses to run on the racetrack, improve the business and regulatory track so everyone can go faster, and let jockeys keep more of their earnings.

• Allow freer trade in skilled labor: Bright foreign workers want to stay and create U.S. jobs after graduating here. That’s a better way to address global competition.

• Avoid safety regulation that makes us less safe: Many frontier technologies like nanotech can make our environment cleaner. Exaggerating risks overlooks the hazards of stagnation.

• Liberalize capital markets: Capitalism ranks among the world’s great democratizing forces, but post-Enron Sarbanes-Oxley regulation has severely distressed smaller companies. Exempting firms with small market capitalizations is just for starters.

There’s more.

It will never fly, though. It doesn’t give the fascists on either side of the aisle enough power over our lives.

Business, Economics, Media Criticism, Political Commentary, Science And Society

The Name Changes

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…but the game remains the same:

Back in the gloriously unregulated 1950s, when your average red blooded American kid could still buy cherry bombs and M-80s without a bunch of nanny-state do-gooders getting their knickers in a twist, and my favorite toy was a home lead smelter for making toy soldiers, the kids in my family used to play Blind Man’s Bluff in the rec room down in the basement. The person who was ‘it’ put a pillowcase over their head and tried to catch the other kids; the only rule was that the kids trying not to be caught couldn’t touch the floor. You had to jump on the furniture — from chair to chest to couch and, if you were good, to the magazine stand.

It was an excellent game; unfortunately the combination of giggles and loud bangs and crashes as we bumped into each other and knocked over the various lamps and vases that somehow kept getting in the way soon attracted my mother’s attention. She’d open the door to the basement, peer down into the noisy darkness and shout “What are you kids doing down there?”

“We’re just playing Blind Man’s Bluff,” we said with that innocent little voice kids use.

“Well stop it,” she said, unsympathetically.

That was the end of our fun for a while, until my brother Chris had a brilliant idea: we’d change the name of the game. We wouldn’t play Blind Man’s Bluff anymore; we’d just play Pillowcase Risk. We tried to keep the noise down for a while, but that didn’t last. Soon the basement was as noisy as ever, and once more my mother came to the door.

“Are you kids playing Blind Man’s Bluff?”

“Oh, no, Mommy,” we said in tones absolutely oozing with sincerity.

“Well keep it quiet down there.”

This worked for a while, but my mother is a cynical and suspicious person. After a couple more trips to the door to stop the riots downstairs, she shouted “If you aren’t playing Blind Man’s Bluff, what are you doing down there?”

“We’re just playing Pillowcase Risk.”

“I don’t care what you call it,” she said. “You aren’t making that kind of racket in my house.”

This is pretty much what is going on in the Congress. “What are you kids doing down there,” ask the voters, who’ve noticed some banging and crashing in the basement. “Are you kids writing a Carbon Tax?”

The greens check quickly with the focus groups and pollsters before shouting back up, “No, Mommy, of course not. We aren’t playing Carbon Tax. We’re playing Cap and Trade.”

Let’s just cut to the chase and call modern environmentalism what it has become — another form of socialism.

Business, Economics, Media Criticism, Political Commentary

As Dave Weigel Was To Conservatives

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So is Steve Pearlstein to businessmen.

I heard that interview in the car, and was just shaking my head. How is it that someone this clueless about business and businessmen covers them as his beat? Just another reason that the legacy media is going down the tubes. As one commenter noted, that interview could have come right from Atlas Shrugged.

Via Instapundit, and yes, Amity Shlaes’ history of the Depression makes a hell of a lot more sense to me than any others I’ve read of it.

Business, Economics, Political Commentary

The Land Of Obama

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Leads the way to fiscal meltdown:

The state of Illinois — broke, overleveraged, and still refusing to get its accounts in order — is up to something interesting: selling bonds to meet its pension obligations. As one of the many states that refuse to set aside adequate money to fund its public-employee pensions, Illinois is headed to the debt markets to raise $3.7 billion for pension liabilities to get it through the year. This is a double dip: In January, Illinois sold $2.4 billion in bonds for pension obligations. Actually, make that a triple dip: It sold $10 billion in bonds to fund its pension liabilities in 2003. “States don’t traditionally fund their pensions with debt,” says CNN in a nice bit of understatement, “but the practice frees up other money that can be used for operations.” The double whammy here is that Illinois’s pensions are in trouble because it already spent the money it needed for its pension contributions in past years on other spending: Which is to say, Illinois is borrowing money it will have to repay eventually to repay the pension money it already spent to pay for other spending it couldn’t afford then and can’t afford now. If you’re wondering where Barack Obama developed his fiscal finesse, you don’t have far to look.

And wasn’t it nice of them to send him to Washington where he can do the same thing to the rest of us?

Business, Economics, Media Criticism, Political Commentary, Science And Society

The Big Green Lie

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Exposed:

Greens who feared and climate skeptics who hoped that the rash of investigations following Climategate and Glaciergate and all the other problems would reveal some gaping obvious flaws in the science of climate change were watching the wrong thing. The Big Green Lie (or Delusion, to be charitable) isn’t so much that climate change is happening and that it is very likely caused or at least exacerbated by human activity. The Big Lie is that the green movement is a source of coherent or responsible counsel about what to do.

The greens claim to be diagnosticians and therapists: that they can both name the disease and heal it. They are wrong. The attitudes and political vision of a group of NGO pressure groups may work when it comes to harassing Japanese whale ships in the Antarctic; this vision and these people come up short when set against the challenge of moderating the impact of human industrial activity on the earth’s climate system.

They come up short in many areas.