In an effort to make housing more affordable federal regulators have done the opposite, but this cost is hidden by the lack of innovation which has locked the market for housing. To paraphrase Glenn Reynolds, by subsidizing the markers of success they have raised the cost in ways even they do not understand. If you cannot afford a house one would be better served to rent than to add debt you cannot handle. Somebody pays.
Read More“We know public schools have failed because more than half of new students at community colleges require remedial courses in math, English or both. “
Read MoreDescriptive 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.
Read More“There are no solutions, only tradeoffs.” Could the tax credits granted to the wealthy for historical renovation serve us better if it was used to provide health care for the poor? Could it be better served invested in a productive enterprise innovating new products, generating economic growth and dividends which will provide additional tax revenue instead of less?
Read More“The long run budget problem has essentially nothing to do with the Trump tax cut. It has been brewing under Bush, Obama, and Trump. It fundamentally comes from growth in entitlements an order of magnitude larger. “
Read More“A key principle here is that the overall marginal tax rate matters. There is a tendency, especially on the left, to quote only the top Federal marginal rate of about 40%, and to say therefore that high income Americans pays less taxes than most of Europe. But that argument forgets we also pay state and sometimes local taxes.”
Read Morefrom John Cochrane
“The larger economic point: In the end, investment in the whole economy has nothing to do with the financial decisions of individual companies. Investment will increase if the marginal, after-tax, return to investment increases. Lowering the corporate tax rate operates on that marginal incentive to new investments. It does not operate by “giving companies cash” which they may use, individually, to buy new forklifts, or to send to investors. Thinking about the cash, and not the marginal incentive, is a central mistake. (It’s a mistake endemic to Keynesian economics, but the case here is supply-side, incentive oriented.)”
The point is that the subject is much more complicated than most are willing to accept. Even the most respected journalists are seduced more by the political angle than accuracy and open mindedness. This travesty is multiplied thousands of times on the social media by the lazy who read for confirmation rather than information.
Read MoreSome advice for the new president from economist John Cochrane in the Wall Street Journal, Don’t Believe the Economic Pessimists: Health. Replace ObamaCare with a simple health-insurance voucher. Deregulate insurance and entry into health care dramatically. Finance. Replace strangling regulation of financial companies
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