Category Archives

Archive of posts published in the category: Economics

Is Inequality a Problem?

Relative poverty is a very different problem from absolute poverty.  If you were sitting in a room with a 100 executives making a six figure income and Bill Gates walked in, the inequality would skyrocket.  Is that a problem?

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Peter’s Wall

When you rob Peter to pay Paul you can count on Paul’s approval, but you can also count on Peter moving to another more friendly place.  When you try to build a wall to keep Peter in, you also discourage Peters from moving here, and you encourage young and enterprising Peters to move away BEFORE they become wealthy enough to be worth robbing.

Warren’s policy is as destructive of our long term financial health as any policy we can imagine. 

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Elizabeth Warren’s Wall

Warren uses ‘rich people’ as a scapegoat in the same way the classical bigots of history used religious and ethnic  vulnerable minorities and the ‘others’.  It is a form of intellectual bigotry and is clouded in the same lethal combination of ignorance and dishonesty.

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The Morality Tax

“Because Sweden is well-governed, it treats its tax regime as a question of revenue rather than a question of so-called social justice…”

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Another Failed God

“the worst forms of tyranny very much include majoritarian tyranny. One might think that the Trump presidency would cause progressives to think twice about what William F. Buckley Jr. dismissed as “the authority of political truths arrived at yesterday at the voting booth.”

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A Financial Warning Shot

The bailout of the overnight repo market by the NY Fed has raised a lot of questions. Why was the financial market unable to respond without Fed help? What caused such an unpredictable surge in demand that caused rates to double overnight? Such conditions are ripe for theories and I have mine.

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The Middle Class Finally Wins

The data counters the false refrain of the Trump cuts only benefiting the rich.  While I have repeated this refrain for years, the actual tax rates matter more than the statutory rates. The difference is the Special Interest Spread- SIS- a term I coined in this article: Save the Swamp.

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Growth and Inequality

It only surprises those whose blind rage over anything Trump combined with their mistaken belief that inequality is “the defining challenge of our time” (Obama).  If you prioritize inequality over growth you will have more inequality and less growth; if you prioritize growth over inequality you will have more growth and less inequality.  

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Europe Needs Doughnut Shops

Europe is at a crossroads of slow economic growth from a post war period of regulation and high taxes and the creation of a new growing underclass of immigrants that are not being absorbed. Avoiding the ensuing financial, social and political costs is unimaginable. England embraced Brexit for several reasons; most often stated was the loss of sovereignty and control of their destiny. They may simply be the first to leave a sinking ship.

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Zero Interest rates challenge our economic assumptions

There is a mismatch between countries with stable financial structures and countries with great growth opportunities. Emerging nations have more room to grow but business owners in third world and some second world countries prefer to hold their cash in more stable economies increasing the supply of cash.

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Ersatz Economics

” Contrary to a widespread impression among noneconomists, though, understanding the vocabulary of economics is not the same as understanding economics.”

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Poverty and Inequality

The prioritization of inequality over poverty is attributed to envy in some cases but more often to a violation of some sense of fairness. But just as we should care not the think of the poor as a single entity, we should be even more cautious not to group the rich or even the super-rich as a single faceless group. Some of the super wealthy have benefited us all, and some have abused the system to their advantage while providing little value. We should distinguish between the rent seekers and the rich who have improved our lives.

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The Wealth Curse

Class warfare as political policy negates the need to articulate limits, acknowledge tradeoffs, understand the process of wealth creation, or do real math that measures and acknowledges real costs and revenues.

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Inflation and MMT

Descriptive powers do not naturally unfold into predictive accuracy. Models by their nature must eliminate variables that can be critical. An economy as large and as dynamic as ours is a wonderful and complicated thing and not cooperative to descriptions and predictions according to simple models.

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Capitalism in Perspective

“The best case for capitalism is a case for markets as one crucial set of institutions in a free society deeply rooted in the West’s liberal and pre-liberal soil. It is crucial because at its best it protects every man’s right to the fruits of his labor, encourages virtues crucial to living free, and has proven unbeatably capable of improving everyone’s living standards. But it must remain rooted, because man does not live by bread alone, and because both the market and the larger society depend upon other formative institutions that help us all become better human beings and citizens.”

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Handcuffing the Invisible Hand

Advocates of single payer and free benefits prove to be ignorant of the price system, profit, productivity and how they function.  While they claim to allocate resources better than the ‘greed’ of the market (a claim easy to totally refute), they are clueless on how the wealth is generated in the first place.

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A Culture of Capitalism

They likely do not recognize the legitimacy of individual ideas as property. For them it is not theft, it is a stark difference in political culture. Trump may think he is seeking simple economic fairness, but he is really asking for China to change its civic culture. This is a challenging reconciliation.

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The Prophet of an Irrational Faith

“How delicious that, as we approach the bicentenary of his birth, Karl Marx should have turned into the thing he loathed above all: the prophet of an irrational faith.”

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The Clipboard Tyrant

“Humans make hierarchies of status and privilege for themselves whenever the opportunity avails itself. This is why all socialist systems that do not work within the constraints of a liberal democratic framework of the rule of law inevitably descend into tyrannies. Give the state unbridled power, and the denizens of the state will use that power toward their own ends.”

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Courageous Smoke

“When a politician declares a “right” in a scarce good, it indicates either that he is a simpleton or that he believes you to be, and one’s as good as the other, that being another defect in democracy.”

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