Category Archives: Economics

Animal’s Daily News

Sleepy-bearYesterday, The Donald gave a major speech on economic issues to the Detroit Economic Club.  You can read the transcript here.  A few key tidbits, including my comments, follows.

She (Her Imperial Majesty Hillary I) supports the high taxes and radical regulation that forced jobs out of your community…and the crime policies that have made you less safe…and the immigration policies that have strained local budgets…and the trade deals like NAFTA, signed by her husband, that have shipped your jobs to Mexico and other countries… and she supports the education policies that deny your students choice, freedom and opportunity.

She is the candidate of the past. Ours is the campaign of the future.

This was a very astute bit of doggerel.  Note that The Donald has staked out the position of himself as the future, Her Imperial Highness as the past; if he can make that picture stick, it will pick him up votes.

Tax simplification will be a major feature of the plan.

Our current tax code is so burdensome and complex that we waste 9 billion hours a year in tax code compliance.

My plan will reduce the current number of brackets from 7 to 3, and dramatically streamline the process. We will work with House Republicans on this plan, using the same brackets they have proposed: 12, 25 and 33 percent.  For many American workers, their tax rate will be zero.

This has similarities to the famous 1981 Reagan tax reforms, which broadened and flattened the tax base by decreasing marginal rates and eliminating a host of deductions.  This policy should appeal to a broad swath of libertarians, supply-siders and economic conservatives – although he may lose some deficit hawks if he cannot demonstrate how his cuts will be (at least) revenue-neutral.

Now let’s look at what the Obama-Clinton policies have done nationally.

Their policies produced 1.2% growth, the weakest so-called recovery since the Great Depression, and a doubling of the national debt.

Doubling – so far.  Imagine four years under Her Imperial Majesty.  This is the point The Donald needs to keep hammering – Her Highness as a third Obama term.

There are now 94.3 million Americans outside the labor force. 20 It was 80.5 million when President Obama took office, an increase of nearly 14 million people.

The Obama-Clinton agenda of tax, spend and regulate has created a silent nation of jobless Americans.

Home ownership is at its lowest rate in 51 years. 21

Nearly 12 million have been added to the food stamp rolls since President Obama took office. 22 Another nearly 7 million Americans were added to the ranks of those in poverty. 23 24

We have the lowest labor force participation rates in four decades.

Again, cogent points – if The Donald keeps hammering away at this message, he stands a good chance of reversing his recent slide in the polls.

In this speech, Trump went through a wide range of issues – energy, regulation, Her Imperial Majesty’s track record as the carpetbagger Senator from New York and as SecState.  Read the whole thing.

Confused BearAt the moment The Donald isn’t doing so well.  PJMedia’s Roger Simon has described a Hillary Clinton Presidency as “An American Tragedy,” and does not rule out the possibility of a civil war as a result – color me skeptical on that, but I admit Simon is not your typical wild-eyed conspiracy theorist.  But a third Clinton Administration is precisely the scenario that will unfold unless The Donald gets his shit together, and fast.

Yesterday’s speech was a step in the right direction.  Let’s hope he keeps it up.  I’m no big fan of The Donald, but I’m inclined to agree with Mr. Simon – four years of Her Imperial Majesty in the Imperial Mansion would be an utter disaster.

Animal’s Daily News

Sleepy-bearHere’s an interesting take on how the ever-expanding welfare state is affecting our society.  Excerpt:

Our nation is in peril today, in no small part due the transformation of the United States from a nation dedicated to self-reliance to one where many are dependent on government. That change creates divisions because finite resources can support only so many dependents. The popularity among the young of Bernie Sander’s plan of free tuition, now largely adopted by Hillary Clinton, stems in no small part from youth’s recognition that they will be transferring a large portion of their earnings to elderly with little prospect of getting the same deal when they become old. It makes perfect sense to get something from the government now when the getting is good. Transfers to others beget the demand for transfers to oneself.

The infamous sign at one Tea Party Rally, “Hands off my Medicare,” is yet another sign of the inevitable conflict in the transfer state. Those on Medicare are worried with justification that the move to Obamacare will have an adverse affect on Medicare.  Obamacare cut Medicare, at least in some part to permit the program to be scored as revenue neutral. More fundamentally, the more the government is involved in health care decisions, the greater the pressure for more severe price controls and other forms of rationing.  Transfers to oneself beget the desire to prevent transfers to others.

Angry-BearIt’s important to note that this view of the wealth-transfer state fits in nicely with the political Left’s view of the economy as a zero-sum game – which contradicts the idea that economies grow, and that wealth is created and earned, not ‘distributed.’  And sadly – as noted above – some on the political Right are quick to jump on the zero-sum train when they see their own personal ox being gored.

 The gist of the article is this:  We, as a nation, have wandered off the traditional American sense of self-reliance.  When faced with adversity a plurality, if not a majority, of Americans shout for the government (by which they mean, taxpayers) to bail them out.  And why not?  The Imperial government has in recent history bailed out auto manufacturers, banks, the list is lengthy; why, voters say, shouldn’t they be included in “too big to fail?”

Thus it is that our elections have become auctions; with candidates competing to see who can offer the voters more of someone else’s stuff.

Animal’s Daily News

Sleepy-bearHere is the Ludwig Von Mises Institute’s take on what a prospective President Trump should do to get the economy rolling.  The list:

First, the Affordable Care Act should be repealed in its entirety and, as you have already pointed out, any prohibition on interstate competition in health insurance also should be repealed. Health care and health care insurance should be left to the market.

Second, all recent thousand-page international trade agreements should be replaced with a single, clearly worded paragraph that allows any U.S. business (or consumer) to trade with any other business (or consumer) anywhere else in the world on terms that are mutually satisfactory. Period.

Third, you or the Congress should immediately remove cannabis (marijuana) from its current Schedule One prohibition status under Federal law; cannabis and drug policy generally should be left entirely to the states. (Ideally the entire Drug War should be scrapped and the production and consumption by adults of any “drug” should be legalized.)

Fourth, the federal minimum wage should either be permanently fixed at its current rate or reduced; legally minimum wages should be left entirely to the states. (Ideally, all minimum wage laws should be repealed since they cause job destruction.)

Fifth, the U.S. corporate tax rate should be reduced so that it is the lowest (not the highest) in the industrial world; ideally, it should be repealed entirely because it constitutes double taxation on shareholders of corporations who also pay income tax on their dividends.

Sixth, the Federal Reserve should be required by law to end all forms of quantitative easing and interest rate regulation now accomplished primarily through open market operations; interest rates for savers and investors should be market determined. In addition, the Federal Reserve’s budget should be determined by Congressional appropriations like that of any other federal department or agency.

And finally, as a long-run solution for our recurring financial problems and economic recessions, replacing the current inflationary paper dollar with alternative monetary arrangements that provide for a sound, market-based commodity money, such as the gold standard, should be seriously considered.

Some of those – the first, second, and fifth – tie in with what The Donald is already saying he’d do if/when elected.  Granted, he is running for President, not king; he would have to have Congress pass legislation to put forth his agenda.

Yes-YOU-bearBut Trump is running on his experience as a deal-maker.  Too often in the last few years “compromise” in Congress has meant that the Right has to go along with what the Left wants.

The Von Mises list is a good list.  It’s a pretty libertarian list, as evidenced by items three, four and six.  Enacting all seven items would go a long ways towards setting the tepid economy to rights and, oh, by the way, restoring some semblance of Federalism to our struggling republic.

As the saying goes:  It’s a good start.

UK to EU: Pip Toodles, Goodbye!

Bye bye!
Bye bye!

Links copied from Drudge:

ELITES GOT IT WRONG: Pollsters, Pundits, Historians, Financiers…
GLOBAL ORDER JOLTED…
TRUMP: TIME TO BELIEVE IN AMERICA…
SKY LIVE… BBC LIVE…
France, Italy, Netherlands Now Want Referendum…
POUND IN HISTORIC COLLAPSE… STOCKS ROCKED… Plunge Protection Teams Mobilize… Global banks seek to reassure… SOROS GOES SHORT…
UK Richest Lose $5.5 Billion! GREENSPAN: ‘Just tip of the iceberg’…
Lawyers Feel The Boon…
CAMERON OUT… BORIS IN?
Merkel warns against kneejerk reaction…
FARAGE IN VICTORY…
‘Europe will fall very soon’…
Final nail in coffin for U.S.-EU trade deal…
Despite ‘Remain’ Scaremongering Germany, USA, Canada Want Trade Partnerships…
Hillary, Obama on WRONG side of history…
PAPER: Her worst nightmare…
Second MAJOR BLOW to Obama in as many days…
Brexit could signal Trump winning White House…
Unlikely Brits Who Caused Revolution…
Leaders failed to sway anger at immigration…

MAG: HOW BRITAIN WAS BROKEN, AND WHAT IT MEANS FOR AMERICA…

It’s going to be an interesting summer, True Believers!

Goodbye, Blue Monday

Goodbye, Blue Monday!
Goodbye, Blue Monday!

Thanks again to The Other McCain for the Rule Five links!

For the record, I’m not commenting on the horrible Orlando Pulse shootings until things have calmed down and more information is available.

Meanwhile, Reason.com has this gem:  Feds Know What’s Best For Your Personal Finances.  The headline alone almost made me burst out laughing.  Excerpt:

The federal government is $19 trillion in debt, yet last week the nation’s newest major regulatory agency tossed out 1,300 pages of new rules for the payday lending industry and it did so, we are told, because it is worried about Americans getting into too much debt and being unable to repay.

That’s rich.

 The new rules issued by the Consumer Financial Protection Bureau (CFPB) will send shock waves through the payday lending industry, likely forcing about 85 percent of storefront payday lenders to shut their doors. But who would shed a tear at the possible demise of that neon-tinged, usurious industry, where people who don’t have any money or credit to begin with can get a small amount of cash if they agree to outlandish interest terms.

Certainly not CFPB Director Richard Cordray.

“Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt,” Cordray said in a statement announcing the new rules. “It’s much like getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey.”

The obvious result of this stupid, thoughtless Imperial policy will be the return of the neighborhood loan shark.  We used to have a friend who was chronically short of money, mostly due to poor financial planning and living above her means; she regularly resorted to the payday loan places to keep herself afloat from week to week, and her debt ever so slowly crept up from month to month.

Facepalm-bearThat’s bad.  But is it the role of our Imperial government to get involved to protect her from herself?  As stated in the Manifesto, it is not the proper role of government to protect people from the consequences of their own bad decisions.  When you remove those consequences, you make bad decisions less onerous on the decision makers.

And if you shut down the thousands of payday loan outlets, believe you me, someone will step up to fill that role; someone operating outside the law.

And the irony of someone from the Imperial government, currently approaching $20 trillion in debt, lecturing consumers on irresponsible borrowing – well, that’s pretty much the textbook definition of irony.

Animal’s Daily News

Excellent BearJust a few tidbits from the early-morning news crawl:

Nearly Half of D.C. Employers Said They Have Laid Off Workers, Reduced Hours Due to Minimum Wage Hikes.  No shit.  The actual minimum wage has an always will be zero – government, by force, pricing the lowest-skilled workers out of the job market will never change that.

Can you guess what happened when Dana Loesch challenged ‘Under the Gun’ director to a debate?  You probably can.  I don’t and never will use Twitter, but I have to admit the exchange here is pretty funny.

If you want economic growth, pick the candidate who’s actually created jobs.  For that matter, pick a candidate who has actually accomplished something – anything –  in the private sector.  Her Imperial Majesty Hillary I fails sadly in that criteria, never having done an honest day’s work in her royal life.

Office-Bear_HibernateFile this one under “belaboring the obvious”:  Babies are cute.  My grandchildren certainly were/are, although only one of them is still in ‘baby’ status.

And file this under “do they really have nothing better to do?”  Baltimore may require warning labels on soft drinks.  Because, you know, people are too stupid to make these kinds of decisions on their own.

On that sugary, fizzy note, we return you to your Thursday, already in progress.

Goodbye, Blue Monday

Goodbye, Blue Monday
Goodbye, Blue Monday!

Thanks as always to The Other McCain for the Rule Five links! Be sure to check out their extensive compendium of toothsome totty.

Why are folks folks on government food assistance suffering from obesity?  Excerpt:

Americans are getting fatter. The share of adults who are “overweight” or “obese” rose from 56 percent in the late 1980s to 70 percent today. The Centers for Disease Control says that obesity is linked to a wide range of serious health problems. The agency calls obesity an “epidemic,” and the federal government has launched many initiatives to tackle it.

Indeed, the government takes obesity so seriously that it funds a $78 billion program for people to buy any type of food they want at 250,000 retail stores nationwide. The program subsidizes 46 million people to buy items such as “soft drinks, candy, cookies, snack crackers, and ice cream.”

Wait a minute. I’m confused—how will that help reduce obesity?

The program used to be called “food stamps,” but the government changed the name to the Supplemental Nutrition Assistance Program (SNAP). This “nutrition” program aims for people to “make healthy choices within a limited budget.” So it is bizarre that it subsidizes items like soft drinks and candy.

Fishing Trip BearSo, the question becomes “why does it subsidize items like soft drinks and candy?”  If one suggests restricting the SNAP program to prohibit this, the frequently encountered retort is that “we can’t tell people what they can and can’t eat.”  Well, my reply is this:  “When they are spending my money, I damn well can.”

Being on public assistance should not be overly comfortable; it should be a trifle embarrassing.  Why?  Because incentives matter.  The incentives should be to drive people off of these programs, not to enable them as a lifestyle.  We must incentivize productivity, not sloth.  I would be in favor of a food-assistance program limited to certain products – bulk rice, bulk beans, powdered milk, ground turkey and beef.  No candy, no soft drinks, no prepared foods.  I occasionally pick up a “take and bake” pizza from our local Papa Murphy’s, and they have a large, prominent sign:  “EBT cards accepted here.”  This is ridiculous.  It needs to stop.

The linked article concludes:  Some policymakers and health experts favor prohibiting food stamps to buy junk food. One advantage would be to reduce demand for the program, and thus reduce taxpayer costs. If policymakers decided that food stamps could only be used for items such as fresh fruits and vegetables, fewer people would use the program, which would be a good thing.

However, a better way to reform the food stamp program would be to end federal involvement altogether, and to transfer the program to state governments. Each state could then decide what level of benefits to provide, as well as decide if taxpayers should be subsidizing “soft drinks, candy, cookies, snack crackers, and ice cream.”

Sleepy-bearPerhaps that second paragraph is even better.  Get the Imperial government out of the system entirely.  Let each state determine its own programs, and let each state be a laboratory for how to best administer these kinds of programs.

You know – Federalism.  A founding principle of our Republic.  Imagine that.

Rule Five Inequality Friday

2016_06_03_Rule Five Friday (1)From Townhall, here is Larry Elder on a topic I’ve devoted a few virtual rants to – “inequality.”  Excerpt (my comments interposed):

Is there a more brain-dead concept than to empower the government to fight “income inequality”? What sane, normal, rational human being thinks that human talent, drive, interests and opportunity can — or should — result in equal outcomes? 

This is a major flaw of redistributive politics; they seek to equalize outcomes.  No two people are equal, and outcomes will never be equal without outright oppressive government regulation.  The only equality that is appropriate for government to enforce is equal treatment under the law.

Despite my love of athletics, I knew in third grade that my friend, Keith, 2016_06_03_Rule Five Friday (2)could run much faster than I could. For two years I played Little League ball, and I got better at it. But no matter how hard I tried or how many hours I spent, I could not hit, run or throw as well as my friend Benji.

Later in life, I started playing tennis, and I became quite passionate about it. But most of the people I played against had started playing years earlier, and most had taken lessons for years. I got better, but given my competitors’ head start, the gap remained.

And the same applies to every field of human endeavor.  I would love to be as successful an author as Tom Clancy, but Tom was just simply better at writing fiction than I am.  In all candor I think my stuff is pretty good, but Tom was a master, and he was paid accordingly.

Financial planners advise clients to start early and stick to some sort of game plan. Is there any wonder that those who do so will have more net worth than those who started later, or who lacked the discipline to follow 2016_06_03_Rule Five Friday (3)and stick to a plan? How is government supposed to address these “unequal” outcomes?

By taking property away from those who have produced or earned it and giving it to those who have not, obviously; just listen to the candidates of the political Left, and this is the root of every policy they propose.

Most entrepreneurs experience failure before hitting on an idea, concept or business that makes money. Even then, it takes 20 to 30 years of long hours and sacrifice, along with occasional self-doubt and a dollop of luck, to become a multimillionaire.

Speaking as a serial entrepreneur myself, I can and do eagerly attest to this.  I have started a dozen or so businesses.  Of all of those, only two – a small publishing company and my current consulting business – have ever returned a profit.  I’ve always held to the idea that failure is life’s way of telling you to work harder, and that’s been key to my own path.  2016_06_03_Rule Five Friday (4)Success is at least 90% persistence.  Some have that, and some don’t; but it is inconceivable that those who achieve success by their own effort should be required to subsidize those who do not make a similar effort.

But this is precisely what the Sanders team wants us to implement as policy.

Elders concludes:  Communism, collectivism and socialism rest on the same premise — that government possesses the kindness, aptitude, judgment and ability to take from some and give to others to achieve “equality.” Karl Marx wrote, “From each according to his ability, to each according to his needs.” And that’s the problem. The statement implicitly acknowledges that some have more aptitude, drive, energy and ability than others. To take from some and give to others reduces the initiative of both the giver and the givee.

2016_06_03_Rule Five Friday (5)This is the fundamental flaw with income redistribution, the very foundation of communism, socialism and collectivism. One would think that Bernie Sanders would have figured this out by now. But wisdom among 74-years-olds, like outcome, is not distributed equally.

But here, Elders misses the primary point.  Equality of outcome – the kind of equality that is eagerly sought by the loony old Bolshevik and his followers – is incompatible with liberty.  You can have free people, free markets, free minds or you can have equality of means (enforced by government.)  You can’t have both.  I have my own two guiding principles for public policy, the two that override every other consideration:  Liberty and Property.  Redistributive policies fly in the face of both.

2016_06_03_Rule Five Friday (6)

Animal’s Daily News

Smiling BearThis came across the other day over at mises.org, one of my usual economics reading spots:  The Success of Socialist Newspeak.    Excerpt:

Liberty, says the Bolshevist, is a bourgeois prejudice. The common man does not have any ideas of his own, he does not write books, does not hatch heresies, and does not invent new methods of production. He just wants to enjoy life. He has no use for the class interests of the intellectuals who make a living as professional dissenters and innovators.

This is certainly the most arrogant disdain of the plain citizen ever devised. There is no need to argue this point. For the question is not whether or not the common man can himself take advantage of the liberty to think, to speak, and to write books. The question is whether or not the sluggish routinist profits from the freedom granted to those who eclipse him in intelligence and will power. The common man may look with indifference and even contempt upon the dealings of better people. But he is delighted to enjoy all the benefits which the endeavors of the innovators put at his disposal. He has no comprehension of what in his eyes is merely inane hair-splitting. But as soon as these thoughts and theories are utilized by enterprising businessmen for satisfying some of his latent wishes, he hurries to acquire the new products. The common man is without doubt the main beneficiary of all the accomplishments of modern science and technology.

And this is the great irony of all those young (and some not-so-young) people who are feelin’ the Bern, and advocating for increasing socialization of our already hybrid economy.

There are few things as ironic as a clueless nitwit of an “anti-capitalist” at a protest with his iPhone clutched in one grubby mitt.  Angry-BearMuch of the issues that the professional protesting class are whinging about are only issues because of the wealth produced by free markets.  And they never once, not even for a moment, stop to consider what would happen to the wondrous, enormous machine of innovation and improvement if the profit motive was reduced or removed.

Fortunately we have a great example for them – Venezuela, where the dining spot of choice these days is a garbage heap.  There’s the end game of the course that the loony old Bolshevik and his followers would set us on.

Free minds and free markets – liberty and property.  That’s the key to economic growth.  It’s too bad none of the candidates for the Imperial Mansion are advocating for those.

Animal’s Daily News

Carl's Jr knows where it's at.
Carl’s Jr knows where it’s at.

Sanders supporters take note:  Here is socialism’s end game, in Venezuela where a burger now costs the equivalent of $170US.  Excerpt:

If a visitor to Venezuela is unfortunate enough to pay for anything with a foreign credit card, the eye-watering cost might suggest they were in a city pricier than Tokyo or Zurich.

A hamburger sold for 1,700 Venezuelan bolivares is $170, or a 69,000-bolivar hotel room is $6,900 a night, based on the official rate of 10 bolivares for $1.

But of course no merchant is pricing at the official rate imposed under currency controls. It’s the black market rate of 1,000 bolivares per dollar that’s applied.

But for Venezuelans paid in hyperinflation-hit bolivares, and living in an economy relying on mostly imported goods or raw materials, conditions are unthinkably expensive.

Even for the middle class, most of it sliding into poverty, hamburgers and hotels are out-of-reach excesses.

“Everybody is knocked low,” Michael Leal, a 34-year-old manager of an eyewear store in Caracas, told AFP. “We can’t breathe.”

triple-facepalmOf course you can’t – the richest nation in South America has been laid low by decades of market-crushing, socialist policies.  And there as here, when socialist policies inevitably fail, the response from the political Left has two parts:

  1. We just need the right Top Men in charge, then it will work.
  2. We just need to socialism harder.

I would almost be supportive of an initiative requiring anyone who is feeling the Bern to go spend a month in Venezuela, so they can see what they are really voting for.

On the burger tangent:  The CEO of Carl’s Jr gets it.  He is advertising his burgers with bikini-clad supermodels, and he doesn’t give two shits about who may be offended by it.  Good for him.

Interestingly, the music in the background is a cover of Ted Nugent’s Stranglehold.  Also, I’m suddenly hungry.