Category Archives: Economics

Business, Economics, Political Commentary, Technology and Society

The Problem With Soaking The Rich

51 Comments

They can vote with their feet:

We believe there are three unintended consequences from states raising tax rates on the rich. First, some rich residents sell their homes and leave the state; second, those who stay in the state report less taxable income on their tax returns; and third, some rich people choose not to locate in a high-tax state. Since many rich people also tend to be successful business owners, jobs leave with them or they never arrive in the first place. This is why high income-tax states have such a tough time creating net new jobs for low-income residents and college graduates.

One has to be particularly pig headed not to understand this.

[Thursday morning update]

Adios, New York:

Last week I spent 90 minutes doing a couple of simple things — registering to vote, changing my driver’s license, filling out a domicile certificate and signing a homestead certificate — in Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually.

By moving to Florida, I can spend that $5 million on worthy causes, like better hospitals, improving education or the Clinton Global Initiative. Or maybe I’ll continue to invest it in fighting the status quo in Albany. One thing’s certain: That money won’t continue to fund Albany’s bloated bureaucracy, corrupt politicians and regular special-interest handouts.

I thought it was stupidly amusing the other week when “Governor” Paterson expressed such glee that he was chasing Rush Limbaugh away with his policies. Well, there are a lot of other people who won’t be any more happy than Rush is to continue to fund these parasites.

[Bumped]

[Evening update]

A disgusting but apt metaphor from Mark Steyn:

As Miss McArdle notes, whether you bail out states “too big to fail” or let them go bankrupt, it will cause pain to taxpayers. But the pain of the latter is relatively short-term. Passing Sacramento’s buck to Washington will accelerate the centralizing pull in American politics and eventually eliminate any advantage to voting with your feet.

Not to be too gloomy, but the country feels like it’s seizing up. It’s as if California and New York have burst their bodices like two corpulent gin-soaked trollops and rolled over the fruited plain to rub bellies at the Mississippi. If you’re underneath, it’s not going to be fun.

I hope that a bailout of California and New York will have huge electoral blowback (including from many Californians, like the ones who voted down the continued state tax and spending on Tuesday, and New Yorkers).

Economics, Political Commentary, Space

More Crazy Talk From Rand

26 Comments

Yes, I understand that there is a desire to salvage the employment of people working on the existing space transportation industry, and particularly the Shuttle components, and that is what is driving the DIRECT design (and Stephen Metschan has weighed in with the conventional false wisdom in comments over there, about the problem with launch costs being one of Isp). The argument is that by using existing parts, we save on development costs. Which is true, probably. If development costs are all that matters.

But, you know, the reason we want to shut down Shuttle isn’t just because it’s “unsafe” (as though safety is a binary condition), but because it kills people at such a high operational cost. And the reason for the high cost? The very thing that they want to preserve, which is the standing army that supports Shuttle.

Now, in the unlikely event I were called to testify before Congress, the first thing that I’d ask them to do would be to ask themselves what goal they are trying to accomplish. Are they trying to accomplish things in space, are they trying to make us seriously space faring, or are they in the business of preserving/creating jobs (note, not wealth)? If the latter, then by all means, come up with Shuttle derivatives. If the former, we need a clean slate.

Sorry, but what some see as a feature, I see as a bug. If people like that feature, then let’s go ahead and keep space access expensive forever. But don’t give us this Bravo Sierra about how it saves money.

Business, Economics, Media Criticism, Political Commentary

The Left’s Conundrum

6 Comments

How to blame George Bush for Europe’s recession:

Do you notice anything funny about these numbers? Here is what I notice: the recession in the US is milder than that of Europe. Every country on this list had more economic shrinkage from 2008 to 2009 (Q1 to Q1) than did the US.

How could this be? Did they all have George Bush for President? Did they all succumb to free market ideology in the last eight years? Did they all repeal part of Glass-Steagall? Did they all spend wildly on an unnecessary war in Iraq? Did they all bankrupt themselves with out-of-control defense spending?

It’s a mystery.

Business, Economics, Media Criticism, Political Commentary

Fascist Democrat Thuggery

4 Comments

Apparently, these people are impervious to irony:

We were outraged to read in today’s New York Times that you are actively opposing our efforts to achieve a diminuation in foreclosures by voluntary efforts… We have set a hearing for November 12, and we invite you now to testify. We believe it is essential for our policymaking function for you to appear at such a hearing, and if this cannot be arranged on a voluntary basis, then we will pursue further steps.

So let me get this straight. Barney Frank, Maxine Waters et al are trying to get banks to do something “voluntarily” by threatening them with “further steps.”

But we shouldn’t worry about threats of tax audits.

Business, Economics, History

The Last GM Dealership

1 Comment

…in the birthplace of General Motors:

We remain the only GM dealership in the city limits of Flint. Isn’t it ironic that the birthplace of General Motors has only one dealership? The employees of the dealership for the most part felt confident that our performance and Mr. Applegate’s integrity and straight forward way of doing business would sustain the storm and survive the cut.

Some felt that our location would be a hindrance to our longevity….perhaps it worked in our favor…who really knows…it’s impossible to second guess or try to predict GM’s thinking. Remaining in business is not only a victory for Mr. Applegate and his employees but also a victory for Flint. I feel that is the untold story. How strange would it be for Flint not to have a GM dealership?

It would be surreal, like the empty field that I saw a couple weeks ago when I drove past where the old AC Spark Plug plant, near which I grew up, and where my father and brother worked for decades, used to be.

Economics, Political Commentary, Social Commentary, Technology and Society

Parasites

18 Comments

Here’s another guest post, from “Douglas,” on the subject of carlessness.

Most of my oh-so-enlightened (all of them college drop outs like me) liberal-minded freaks of friends (no, they are freaks, social deviants) are in fact smart people, but they assume an intelligence that isn’t theirs based upon their defiance of social norms.

Most of them live in the Lincoln Park area of Chicago, and don’t own cars any more; they only update their driver’s licences so that they can defer portions of their taxes to Indiana rules rather than Illinois.

One of them, since he got rid of his car, hasn’t visited his mother once in almost ten years. Since then, he’s gotten married, had two kids, filed for bankruptcy, taken “loans” from his mother, who was there to visit her boy, but he has never found his way across the border for any reason other than pretending he’s an Indiana resident.

Same for some of the other friends, but to a lesser degree.

There is a selfishness to this “I don’t need to go anywhere I can’t walk” attitude. I lived in other countries, and was technically poor, but I still visited my mother, I still made my brother’s wedding, and if I was somewhere that there were roads that got me somewhere, I would get in my car and I would make it to important moments for my friends.

I drove from Chicago to Vegas for a one-night trip three times, so that I could be a part of my friends’ getting married. I got in my car and drove to Florida for the same reason, I made it to Kentucky twice for a cousin’s christening, and again for another cousin’s divorce. (the divorce one is a complicated story)

I drove from Chicago to Hammond, Louisiana four times, because I was the only one who could be counted on to help a friend move back to my area, in an escort, since my friend was so possessive of certain possessions, that he didn’t trust the mover.

It took four trips.

If I didn’t have a car, my friend in Louisiana would have been assed out, if I didn’t have a car, I wouldn’t have been able to be a part of those other very cherished (other than the divorce one, though there is a degree of satisfaction that I felt) events. If I hadn’t had a car.

If you don’t have a car, if you don’t have freedom of independent movement, you are a parasite, and must depend on people who DO have cars, or on people who are taxed to pay for inefficient buses and trains to get you where you need to go.

This “walking” society is a lie. They will walk a few blocks, they won’t walk the miles that the working class did at the turn of the century to get to where they needed to go, instead, they parasitically demand that they have a right to go from one place to another, and everyone else that is not them pay for it.

Economics, Media Criticism, Political Commentary, Social Commentary

Shocking News

34 Comments

It’s cheaper to own a car than to use mass transit. When you take all the costs into account (and even ignoring the convenience factor) it’s not really surprising at all:

Anti-car people will argue that the high cost of living in New York City or San Francisco is some kind of anomaly, and that proper government action could magically create low cost of living dense urban areas. I am doubtful. Government regulations usually drive up costs rather than reduce costs (with the exception of regulations carefully thought out to prevent value transference). In fact, the rent control laws in New York City, which liberals think are making housing more affordable, are actually contributing to the high cost of living here. I’ve previously suggested two reasons why dense cities are so expensive: (1) dense cities create transportational and space inefficiencies; and (2) dense cities attract liberal voters who elect liberal politicians who enact dumb laws which increase the cost of living. Maybe there is some third or fourth reason as well. Until someone can demonstrate a place where it’s reasonable to be carless and it doesn’t cost a fortune to live there, one has to assume that such places are inherently economically inefficient.

The arguments against cars and sprawl are aesthetic (and elitist), not economic.

[Saturday update]

Randall Parker has further observations.

[Bumped]

Business, Economics, Political Commentary

“Revenue Neutral”

20 Comments

Sorry, there’s no such thing as a “revenue neutral carbon tax.” Or if there is, you’d stumble on it by pure luck:

The most important point is that revenue neutrality is most likely a mirage. We would have to maintain the carbon tax for decades in order to generate the consumption reductions that advocates argue will occur, but FICA rates aren’t static over decades. In 1950 the FICA rate was 1.5%; by 1970 it was 4.8%; by 1990 it had risen to its current rate of 7.65%. It has been stable for about two decades, but meanwhile the programs that it (in theory) funds are in crisis.

Over the next few decades, we should expect to be in bitter political fights over changing retirement ages, benefit levels, access to publicly-funded medical care, tax rates, and other measures designed to make these programs financially stable. The FICA rate will not be insulated from this process. Who could possibly say that when it has increased in irregular and unpredictable steps to, say, 15.3 percent between now and 2028 in response to various political crises, that, but for the carbon tax, it would otherwise have been 16.5 percent?

I’ve previously discussed this conceit of politicians that they can predict the economic effects of their nostrums:

When a politician says that he’s going to either cut or increase your taxes, he is engaging, wittingly or not, in a conceit and a deceit. He says it as though he has the power to do any such thing, when in fact he does not. He has no power except to reduce or increase the rate at which you pay taxes, whether on property, income, or whatever.

Think of it as the difference between a joystick and a mouse. With a computer mouse, you can point directly to the place that you want to be on a screen. With a joystick, you can only control the rate at which you move toward it, and in so doing, the target may move, and it may move faster or in a different direction than you can keep up with using your rate control. Politicians talk about tax cuts as though they have a computer mouse that allows them to pass a law and a specified amount of revenue will roll in, but the reality is that they have a slow joystick, with a nebulous relationship to the eventual goal.

As Manzi says, TANSTAAFL. I think that dropping both sides of the payroll tax until the economy recovered would have been a hell of an instant stimulus, but eventually, that money’s got to be put back into the system.