Category Archives: Econ
Dr. Thomas Sowell on Intellectuals, Barack Obama, and The Vision of the Anointed
Dr. Thomas Sowell: Why Teachers Unions and “Social Justice” Harm Minority Students
Dr. Thomas Sowell: Economic Facts and Fallacies
This is a must see video.
Manyof the assumptions that you see parroted on campus about several subjects are fallacies.
Dr. Thomas Sowell: A Conflict of Visions
Dr. Sowell describes the critical differences between interests and visions. Interests, he says, are articulated by people who know what their interests are and what they want to do about them. Visions, however, are the implicit assumptions by which people operate. In politics, visions are either constrained or unconstrained. A closer look at the statements of both McCain and Obama reveals which vision motivates their policy positions, particularly as they pertain to the war, the law, and economics.
This is also a great exploration of the difference between constrained realists and unconstrained visionaries, traditionalists vs. central planners, the empirical world vs. the normative.
Dr. Walter Williams: Healthcare is not a right
Dr. Walter Williams: Why government central planning equals tyranny
Dr. Walter Williams: Housing Crisis Culprits
Of course Dr. Williams is black. That means if you don’t agree with him you are automatically a racist. Just ask ABC News.
Dr. Walter E. Williams: Redistribution of Income
Dr. Walter Williams: Washington Cost Estimates Are Lies
Baltimore Passes Soda Tax, Pepsi Closes Plant in Baltimore.
The Pepsi plant in Baltimore will no longer make soda, and the company plans to lay off 77 people as officials have decided to stop manufacturing operations — a decision they blame in part on a controversial new beverage tax in the city.
The last cans and 2-liter bottles of Pepsi-Cola, Diet Pepsi, Mountain Dew and other sodas ran through the production line Monday morning. Executives at Pepsi Beverages Co. told workers in meetings later in the day that production would be halted for good. Pepsi officials said they would work out details regarding the layoffs, including potential severance, with the local Teamsters union.
Kristine Hinck, a company spokeswoman, said, “Given the climate, making a beverage in a city where there is a beverage tax certainly doesn’t help.” – Ya think?
You would have thought that Maryland would have learned its lesson after the state lost massive revenue after it imposed its now infamous “millionaire’s tax”.
I am going to go buy a case of Diet Pepsi today.
F. A. Hayek – How Union Overreach Causes Unemployment
Indeed when the price of labor is artificially increased beyond the value of that labor several things happen:
1 – Since there is only so much of the percentage available from variable costs for labor therefore union over reach causes there to be less employees.
Think about it. How often do you stand in line at Kroger when they obviously have a shortage of cashiers? So the result is not management vs. employee, it becomes employee vs. employee; which employee will get whacked because there is only so much available for labor?
2 – At first this causes companies to be more efficient, but eventually that efficiency comes at the cost of labor. For example: have you noticed that self checkout machines came first at union grocery stores? The stores will increase technology to eliminate positions.
Ford Motor Company has a new high tech plant that can make five cars on a single production line. Since union rules do not allow workers to use that technology and make so many different lies Ford has made these new plants in Canada, Mexico and Brazil.
3 – When is the last time you went to a gas station and got service by a young apprentice? Why do you think that is?
Dr. Thomas Sowell: Too many people coming out of even our most prestigious academic institutions graduate with neither the skills to be economically productive nor the intellectual development to make them discerning citizens and voters.
One of the sad and dangerous signs of our times is how many people are enthralled by words, without bothering to look at the realities behind those words.
One of those words that many people seldom look behind is “education.” But education can cover anything from courses on nuclear physics to courses on baton twirling.
Unfortunately, an increasing proportion of American education, whether in the schools or in the colleges and universities, is closer to the baton twirling end of the spectrum than toward the nuclear physics end. Even reputable colleges are increasingly teaching things that students should have learned in high school.
We don’t have a backlog of serious students trying to take serious courses. If you look at the fields in which American students specialize in colleges and universities, those fields are heavily weighted toward the soft end of the spectrum.
When it comes to postgraduate study in tough fields like math and science, you often find foreign students at American universities receiving more of such degrees than do Americans.
A recent headline in the Chronicle of Higher Education said: “Master’s in English: Will Mow Lawns.” It featured a man with that degree who has gone into the landscaping business because there is no great demand for people with Master’s degrees in English.
Too many of the people coming out of even our most prestigious academic institutions graduate with neither the skills to be economically productive nor the intellectual development to make them discerning citizens and voters.
Students can graduate from some of the most prestigious institutions in the country, without ever learning anything about science, mathematics, economics or anything else that would make them either a productive contributor to the economy or an informed voter who can see through political rhetoric.
On the contrary, people with such “education” are often more susceptible to demagoguery than the population at large. Nor is this a situation peculiar to America. In countries around the world, people with degrees in soft subjects have been sources of political unrest, instability and even mass violence.
Nor is this a new phenomenon. A scholarly history of 19th century Prague referred to “the well-educated but underemployed” Czech young men who promoted ethnic polarization there– a polarization that not only continued, but escalated, in the 20th century to produce bitter tragedies for both Czechs and Germans.
In other central European countries, between the two World Wars a rising class of newly educated young people bitterly resented having to compete with better qualified Jews in the universities and with Jews already established in business and the professions. Anti-Semitic policies and violence were the result.
It was much the same story in Asia, where successful minorities like the Chinese in Malaysia were resented by newly educated Malays without either the educational or business skills to compete with them. These Malaysians demanded– and got– heavily discriminatory laws and policies against the Chinese.
Similar situations developed at various times in Nigeria, Romania, Sri Lanka, Hungary and India, among other places.
Many Third World countries have turned out so many people with diplomas, but without meaningful skills, that “the educated unemployed” became a cliche among people who study such countries. This has not only become a personal problem for those individuals who have been educated, or half-educated, without acquiring any ability to fulfill their rising expectations, it has become a major economic and political problem for these countries.
Such people have proven to be ideal targets for demagogues promoting polarization and strife. We in the United States are still in the early stages of that process. But you need only visit campuses where whole departments feature soft courses preaching a sense of victimhood and resentment, and see the consequences in racial and ethnic polarization on campus.
There are too many other soft courses that allow students to spend years in college without becoming educated in any real sense.
We don’t need more government “investment” to produce more of such “education.” Lofty words like “investment” should not blind us to the ugly reality of political porkbarrel spending.
Obama’s Treasury Secretary Tim Geithner: Taxes on ‘Small Business’ Must Rise So Government Doesn’t ‘Shrink’ (video)
Wow, Geithner is spinning hard. 3% of businesses. Most businesses are on paper or are 1-2 man operations. Small businesses used to do almost 80% of the hiring in this country, now it is only 64%. The tax he wants will affect most businesses who actually hire. That is the point he is so desperate to avoid. Congressman Ellmers almost put him away and the following two questions in red text would be the key followups that would have finished him, “Mr. Geithner, how much of that 3% of small businesses you want to tax actually employ five or more people?”
At the same time the Obama Administration is fine with his friends at Google paying 2.4% on $3.1 billion in profits. General Electric, which was ran by Obama’s friend GE CEO Jeffery Immelt who just took a job at the White House, paid no tax on $14.2 billion in income and actually got government subsidies. GE also owned MSNBC until just recently, but I am sure that is just another one of those funny coincidences.
Geithner talks about the top 2%, but what he didn’t tell you is that the way the tax code works that top 2% excludes much of the very wealthy [see this link for details why]; who such a tax smacks are the genuine wealth creators , upper middle class risk takers and small businesses. A husband and wife with two kids may own and operate three local pizza shops and on paper that small business will bring in $250,000 a year in income (notice I did not say profits, I said income), but most of that money will go to paying employees, buying the pizza delivery man’s gasoline, food, energy for the ovens and freezers, boxes, cleaning supplies, wages, other taxes etc. Everyone must get paid before the owners do and they will be lucky to scrape $50K for themselves, which in turn they will be paying more taxes on.
Then comes the right hook, “Mr. Geithner, how can one be against small businesses that actually hire (pause for effect) and for jobs at the same time?”
I just talked to Addison Scott, who is on Congressman Ellmers’ staff, and I passed those two questions on to them. I can’t wait to see her lay these two questions on Geithner and watch him squirm.
Geithner’s explanation of the administration’s small-business tax plan came in an exchange with first-term Rep. Renee Ellmers (R.-N.C.). Ellmers, a nurse, decided to run for the U.S. House of Representatives in 2010 after she became active in the grass-roots opposition to President Barack Obama’s proposed health-care reform plan in 2009.
“Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring,” Ellmers told Geithner. “They just simply cannot.”
She then challenged Geithner on the administration’s tax plan.
“Looking into the future, you are supporting the idea of taxation, increasing taxes on those who make $250,000 or more. Those are our business owners,” said Ellmers.
Geithner initially responded by saying that the administration’s planned tax increase would hit “three percent of your small businesses.”
Ellmers then said: “Sixty-four percent of jobs that are created in this country are for small business.”
Geithner conceded the point, but then suggested the administration’s planned tax increase on small businesses would be “good for growth.”
Good for the growth of government perhaps, not the economy.
Dr. Walter Williams: Unions discriminate against black Americans, minimum wage impacts black teen unemployment. Regulations make licencing so expensive they keep minorities out.
When I was growing up, gas was 70 cents a gallon and when you went to get gas, a young person who was apprenticing at the service center attached to most every gas station would come out, pump your gas, check your tires and fluids, wipers etc. That young person was apprenticing under an experienced mechanic and learning valuable skills.
Those days are gone. Now gas is $4.00 and you pump it yourself. Service? Forget it, you will be lucky if the clerk speaks English. The minimum wage, labor regulations, and government regulations have brought such apprenticeships to a screeching halt.
Obama Policies Failing: Sinking Stats Tell Story
Central planning of an economy doesn’t work in large, diverse, environments, and works poorly in small homo-genius societies (Greece, Spain, Portugal all collapsing).
Government spending does not create wealth and in only limited circumstances does it have a long term positive impact with a high velocity of money. Politicians do not spend money on the greatest needs of individuals, businesses and communities; rather they spend those dollars with the hope that it will buy votes, increase influence, and come back in the form of campaign donations. People tend to act in their own self interest, so how can a politicians best interest be everyone else’s?
Central planners are also very fond of “tax credits” which they call “tax cuts”. You get a tax credit if you engage in a behavior that the government approves of. This causes people and businesses to act not in what is best for them, their family, their business, their economic needs or the needs of their customers, rather they are acting in the interests of a politician. How is that good for the economy when it comes down to you feeding and taking care of your family? This also results in mass corruption as the tax code becomes a behemoth filled with politicians picking winners and losers. This is called “crony capitalism” or “state run capitalism” (all of which is just a mutation of socialism/corporatism).
Tax credits are also used as the politicians rhetorical ruse. Very often government tax credits are such a regulatory burden they are an economic non starter or they are so “targeted” it means that almost no one will qualify for them [Example: Tax credit for a family of four who makes under $40,000 per year, who is buying house over 2,000 square feet, that is ran by solar power].
The more the planner’s plans fail the more the planner’s plan – Ronald Reagan.
With a flamboyant downgrade of the outlook for economic growth, jobs and profits, Wednesday’s 280-point Dow plunge to launch the so-called June stock swoon is a warning shot across the bow.
The Dow tanked alongside a batch of dismal economic data. The ISM manufacturing index, ADP employment, Case-Shiller home prices and consumer confidence are all pointing to 2 percent growth or less, rather than the kind of 5 percent growth we ought to be getting coming out of a deep recession.
The economy now looks like a Government Motors engine that’s stalling out. Or perhaps, with energy and food inflation, and housing deflation at the same time, the economy is acting like a pinball machine on permanent tilt.
There’s a key message here: Big-government stimulus never works.
First there was the massive Barack Obama stimulus spending. Then QE1. And now QE2 is winding down. And what did we get for all this? Slower growth overall, paltry job creation, more energy and commodities inflation, continued housing deflation, and virtually no new business start-up entrepreneurship.
We know the Obama spending package failed to create a 7 percent to 8 percent unemployment rate, as advertised. And now we’re learning that the Fed’s QE2 has actually done more harm than good.
All that money-printing stimulus worked to depreciate the dollar and jack-up commodity prices, especially oil and gasoline, but also food. So both companies and consumers have been punished.
Some demand-side boneheads on Wall Street want the Fed to move to QE3, allegedly to fight a stalling economy. But if the central bank prints another $600 billion or so, all that will do is sink the greenback another 10 percent and drive oil and gasoline prices higher and higher. And that, in turn, will slow business and consumers even more.
BROKEN PROMISES: CBO AND CMS CONFIRM HIGHER COSTS AND HIGHER TAXES FOR OBAMACARE!
It has been happening for a long time, I wrote this post in April 2010 on my old college blog…
And after the New York Times and the Dept of HHS confirmed that we conservatives were right all along…
Via Paul Ryan:
WASHINGTON – House Budget Committee Ranking Republican Paul Ryan (WI) highlighted the latest evidence that the recently enacted health care overhaul exacerbates the problems in health care and violates the President’s central promises.
Yesterday, the Congressional Budget Office [CBO] released an analysis that estimates large tax increases will hit millions of Americans making well below $200,000. The CBO findings stand in stark contrast to President Obama’s promise not to tax any individual making less than $200,000 a year. According an analysis analysis by the House Ways and Means Committee Minority Staff, the President has already signed into law 14 separate violations of his tax pledge.
Adding insult to injury, the Centers for Medicare and Medicaid Services [CMS] issued another damaging blow to the President’s central case for health care reform: the need to get a grip on sky-rocketing costs. In a detailed analysis, the CMS Chief Actuary made clear that the new health care law will further drive costs upward, increasing national health expenditures by an additional $311 billion above projected costs. The new law would adversely impact Medicare providers and reduce Medicare Advantage enrollees by 50%, according the government report.
Following the release of the CMS and CBO reports, Ranking Member Ryan issued the following statement:
“As Washington is moving fast to takeover other sectors of our economy, we are learning more about the costly consequences of their most recent overreach on health care. President Obama reiterated a number of false promises throughout the partisan health care campaign, including a pledge that his overhaul would lower health care costs and would not increase taxes on individuals making less than $200,000 a year. This week’s double-whammy from CMS and CBO exposes the emptiness of the President’s rhetoric, confirming what Americans feared throughout the debate.”
“Rather than fix what’s broken in health care, this deeply flawed law will exacerbate the problems in health care. Two independent, nonpartisan analyses make clear that the onslaught of mandates, controls, taxes, and entitlement spending will impose a heavier burden on American families, including those already struggling to make ends meet. We must begin anew to mitigate the disaster from this health care debacle: let’s repeal this costly misstep and replace it with patient-centered, fiscally-responsible reform.”
Dr. Walter Williams: Government Lies
President Obama and congressional supporters estimate that his health care plan will cost between $50 and $65 billion a year. Such cost estimates are lies whether they come from a Democratic president and Congress, or a Republican president and Congress. You say, “Williams, you don’t show much trust in the White House and Congress.” Let’s check out their past dishonesty.
At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That’s nine times Congress’ prediction. Today’s Medicare tab comes to $420 billion with no signs of leveling off. How much confidence can we have in any cost estimates by the White House or Congress?
Another part of the Medicare lie is found in Section 1801 of the 1965 Medicare Act that reads: “Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine, or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer, or employee, or any institution, agency or person providing health care services.” Ask your doctor or hospital whether this is true.
Lies and deception are by no means restricted to modern times. During the legislative debate prior to ratification of the 16th Amendment, President Howard Taft and congressional supporters said that only the rich would ever pay federal income taxes. In 1916, only one-half of 1 percent of income earners paid income taxes. Those earning $250,000 a year in today’s dollars paid 1 percent, and those earning $6 million in today’s dollars paid 7 percent. The lie that only the rich would ever pay income taxes was simply a lie to exploit the politics of envy and dupe Americans into ratifying the 16th Amendment.
The proposed tax increases that the White House and Congress are proposing will probably pass. According to the Washington, D.C.-based Tax Foundation, during 2006, roughly 43.4 million tax returns, representing 91 million individuals, had no federal tax liability. That’s out of a total of 136 million federal tax returns. Adding to this figure are 15 million households and individuals who file no tax return at all. Roughly 121 million Americans — or 41 percent of the U.S. population — are completely outside the federal income tax system. These people represent a natural constituency for big-spending politicians. Since they have no federal income tax obligation, what do they care about higher taxes or tax cuts?
Another big congressional lie is Social Security. Here’s what a 1936 government pamphlet on Social Security said: “After the first 3 years — that is to say, beginning in 1940 — you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year … beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. … And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year.” Here’s Congress’s lying promise: “That is the most you will ever pay.” Let’s repeat that last sentence: “That is the most you will ever pay.” Compare that to today’s reality, including Medicare, which is 7.65 cents on each dollar that you earn up to nearly $107,000, which comes to $8,185.
The Social Security pamphlet closes with another lie: “Beginning November 24, 1936, the United States government will set up a Social Security account for you … The checks will come to you as a right.” First, there’s no Social Security account containing your money, but more importantly, the U.S. Supreme Court has ruled on two occasions that Americans have no legal right to Social Security payments.
We can thank public education for American gullibility.
More Lies
The Great Global Warming Swindle
The entire documentary that aired on British Television.
Dr. Thomas E. Woods’ Video: The Depression of 1920 and Why You Have Never Heard of It.
Did you even know we had a depression after Woodrow Wilson’s experiment in progressivism? Did you know that the 1020’s had it’s own Ronald Reagan who lowered taxes, spending, and government controls? The economy recovered in a short time and in fact went on a fantastic growth cycle. How could you not know about this? How come your teacher doesn’t know? This is a 49 minute lecture that is a very good lesson in economics and how propagandized our schools are.
Bill O’Reilly Now Convinced: The Far Left is Trying to Blow Up the System
Via The Blaze:
Bill O‘Reilly and Glenn Beck don’t always see eye-to-eye — they don’t always agree on everything. But one thing that O’Reilly is agreeing with Beck on now is that there are those on the left who would love to see an economic collapse so that they can remake the system. Chief among those cheerleaders, O’Reilly says, is Beck’s “spooky guy” — George Soros.
Click the link below to watch the video.
http://video.foxnews.com/v/4639217/who-won-the-budget-battle/
Bill O’Reilly resisted accepting this premise for a long time; years even. But as the evidence mounted up it became hard to ignore.
The Democrats are the party of the status quo when it comes to Social Security and Medicare while the governments own numbers admit that these programs will go bankrupt and crash very soon. The reductions in spending discussed in the video were not real cuts at all, they were only reductions in Obama’s proposed budget, and even so it was not even a 1% cut in that budget proposal. The truth is that spending was higher this year than last year, so in reality there were no real cuts, yet the left was still upset.
One of the big problems with Medicare is that the bureaucracy is expensive and truly gargantuan. Billions of dollars go to fund those government jobs that should go to seniors care. The Democrats benefit in the short run and the long run by letting Medicare collapse. In the short run, Medicare not being reformed will mean countless thousands of government employees, will be paying Democrats and the government union dues which is used to finance Democrat political campaigns. Government employees make between 30% and 300% more than their private sector counterparts depending on the job field. That is right folks, Medicare funds are essentially being used to fund Democrat political campaigns.
In the long run, when Medicare explodes seniors will be forced into ObamaCare, which can ration care and push doctors into just “giving gramps the pain pill” kind of care. This is why the Democrats raided half a TRILLION DOLLARS of Medicare funds to pay for the ObamaCare implementation. The administration had moved to implement “death panels” like language but outrage forced them to delay implementation. The bottom line is that ObamaCare gives the President, or the HHS bureaucrat the regulatory authority to implement “death panel” like rationing with the stroke of a pen.
Political Arena 