Category Archives

Archive of posts published in the category: Economics

Radical Omnipotence

“I care less about whether the top personal income-tax rate is 39 percent or 36 percent than I do about whether we can pick one and stick to it for a few decades at least, and, more generally, about ensuring that we do not undertake big and disruptive changes to the policy environment without real consensus and careful deliberation. But instead of that conservative approach, every time a party achieves a temporary majority in Congress or control of the White House, its leaders promise revolution and a radical reordering of taxes, regulations, incentives, terms of trade, and everything else they can think of. “

Read More

Covert Spending

“Subsidized credit is the coward’s way of spending money on friends and cronies, because spending-by-lending allows you to list these subsidies as “assets” on your books rather than characterizing them as spending.”

Read More

Policies and Outcomes

“That is the great Democratic tax strategy: create tax subsidies for businesses and then, two elections later, complain that businesses take advantage of tax subsidies. “

Read More

Biden has Become a Scapegoat

Our political elite took supply for granted.  They confused dollars with goods.  Demand stimulus is a very short term and limited tool.  If we get into debt to stimulate demand, what happens when we pay it back?  Debts are always repaid – one way or another- even if you are not a Lannister.

Read More

Normalizing Luxury

There is the unplanned and unintended benefit of making luxuries into ordinary items. Such spending primes the pump on some items, but it is not an essential element for progress.  When wealth is generated to provide consumers with products and services they want we all benefit; when wealth is generated by rent seeking behavior most of us lose.

Read More

Remembering the Yacht Tax

Progressives think the Constitution is organic and the economy is mechanical; in reality it is the reverse.  Thinking you can tax an isolated segment without affecting others ignores the dispersed nature of knowledge that no central authority can emulate.

Read More

Vichy Capitalism

The regulatory burden rarely get the coverage of tax policy because it is complicated, hard to measure and reporters are lazy- yet the combination is the total friction cost on business.  Increasing the regulatory burden while stimulating the money supply may be the simplest and best definition of stagflation.

Read More

Economic Nationalism

“For the politician, jobs are not a means to some end — Cadillacs, bales of cotton, iPhones — but an end in and of themselves.”

Read More

Expunging Guilt from Affluent Liberals

“Human history for these guys is just an endless rotation of oppressor and oppressed, a revolving door of masters and slaves in Hegel’s view, proletariat and bourgeoisie for Marx, privileged white people vs. marginalized people of color in Critical Race Theory. “

Read More

The Post Covid Economy

When the vaccine is implemented and the pandemic is behind us, there will a powerhouse of pent up demand that will propel a booming recovery. Tax revenues will grow accordingly even without a tax rate increase, but there is a downside.

Read More

Endless Tax Wars

Our biggest challenge is an endless appetite for government spending and an unwillingness and inability to raise taxes enough to support it. The idea that infinite spending can be supported by a small percentage of taxpayer defies basic math and principles of human action. This has caused record deficits and a belief that deficits do not matter and that tradeoffs are no longer required.

Read More

We Have Run Out of Other People’s Money

Economist Greg George, PhD, noted in this environment that the problem with the states in the most critical condition before the Covid shock is not that they are too big to fail but that they are too big to save. We are being forced to face limits we have long ignored.

Read More

The Opposite of Stock Repurchases

While we need to be concerned about the financial condition of essential industries, we should not lose sight of the need to be concerned with the financial condition of the nation they want to bail them out.

Read More

An Addiction to Low Interest Rates

It seems that this can go on indefinitely because we cannot envision the central banks losing control of interest rates, but absence of evidence is not evidence of absence. Believers in Modern Monetary Theory mistake this trend for a true principle. Central banks will remain active in controlling interest rates because the debt is so large that any spike in interest rates would be disastrous. We are stimulating a zombie economy reliant on low interest rates provided by a central government even more dependent on low interest rates.

Read More

The Paradox of Capitalism

Walter Williams properly noted that socialism works if you know everybody’s name; in small family and tribal units.  It is poorly suited to the dispersed knowledge that is the glue of an integrated complex world.  Capitalism is efficient but contrary to our biological nature.  It is no surprise that the growth of tribalism in politics is accompanied by anti-capitalist rhetoric. Capitalism, like democracy, depends on values that may be contrary to human nature, while serving the betterment of mankind in our complex world.

Read More

Economic Growth and Inequality

The passion for equality and social justice often obscures the best way to achieve it. This is the epitome of virtue signaling; policies and results matter more than intent,

Read More

Moral Agency

“The problem for Warren (who should know better) and others like her (who often don’t) is that there is a lot more juice in the moralistic account of economic problems than in the economic account of economic problems. To make things worse, the moralistic account offered by Senator Warren is untrue. Americans are not incapable of being anything other than passive victims of forces beyond their control. “

Read More

Why Has Inflation Not Followed Our Debt?

But these explanations leave me uneasy. Without the pain of excessive government debt is there ever an end to it? It seems doubtful that scarcity has been erased from economic reality. The absence of short-term firewalls has historically led to large reconciliations, and it just seems immoral to spend more that you can pay for. In 50 years gold has risen from $35 to $1517.99 an ounce (1/1/20), does anybody care? The dollar is strong, and the American economy is performing better than any other in the world, even if that only provides a low bar.

Read More

A Greater Display of Democracy

When activists complain of markets failing to serve our needs, they often are just unwilling to pay the market price and are seeking subsidies at someone else’s expense.  Progressives and socialists who insist on government control while speaking in terms of greater democracy are contradicting themselves; the market place properly regulated is the greatest display of democracy.

Read More

Public Choice Theory

“From public choice theory, we also know that government actors have an incentive to pursue shortsighted policies that create highly visible benefits to voters now and impose uncertain costs at some point in the future.”

Read More