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Author Topic: Economics  (Read 124935 times)
DougMacG
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« Reply #400 on: May 01, 2017, 08:13:38 PM »

Judge every Democrat proposal to help or expand the "Middle Class" with this in mind...

"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them."

https://www.usatoday.com/story/opinion/2017/05/01/trump-test-democrats-tax-patriotism-glenn-reynolds/101159082/?siteID=je6NUbpObpQ-sSZk.GAzZjnKA3Zm_U0Yyg

https://philoofalexandria.wordpress.com/2010/09/25/reynolds-law/
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G M
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« Reply #401 on: May 01, 2017, 09:22:33 PM »

"Everybody gets a trophy", writ large.


Judge every Democrat proposal to help or expand the "Middle Class" with this in mind...

"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them."

https://www.usatoday.com/story/opinion/2017/05/01/trump-test-democrats-tax-patriotism-glenn-reynolds/101159082/?siteID=je6NUbpObpQ-sSZk.GAzZjnKA3Zm_U0Yyg

https://philoofalexandria.wordpress.com/2010/09/25/reynolds-law/
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DougMacG
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« Reply #402 on: May 15, 2017, 01:22:47 PM »

"Please feel free to post that in the Tax thread here and the Economics thread on the SC&H forum too."

 http://www.heritage.org/node/18247/print-display
The tax rate cuts of the 1920s were followed by a 61% increase revenues over 7 years.
The Kennedy tax rate cuts brought a 62% increase in revenues over 7 years.
The Reagan tax rate cuts yielded a 54% increase over 6 years (100% over 10 years).

Then when Bush or Trump propose tax rate cuts, the media demands to know how they will deal with the static revenue loss - a demonstrably false premise question.
--------------------------------------

Opponents argue that revenues increase anyway, but the point is that if revenues surge after rates are lowered, the increase in income is that much more - which is a good thing!
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DougMacG
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« Reply #403 on: May 24, 2017, 08:33:53 AM »

"High social transfers not tied to work incentives emerged as the most likely explanation for the low participation rate. The phase-in of ... minimum wage ... may have also helped to drive down participation rates."   - BROOKINGS INSTITUTION (regarding fiscal collapse in Puerto Rico)

http://caseymulligan.blogspot.com/2017/01/who-wrote-this.html?m=1
https://www.brookings.edu/book/restoring-growth-in-puerto-rico/  (Page 29)


Pay for not working hurts work participation.  Who knew?
« Last Edit: May 24, 2017, 08:35:53 AM by DougMacG » Logged
ccp
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« Reply #404 on: May 24, 2017, 08:41:35 AM »

"High social transfers not tied to work incentives emerged as the most likely explanation for the low participation rate"

What are "high social transfers" - is this politically correct speak for free government sponsored benefits ?
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DougMacG
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« Reply #405 on: May 24, 2017, 09:31:29 AM »

"High social transfers not tied to work incentives emerged as the most likely explanation for the low participation rate"

What are "high social transfers" - is this politically correct speak for free government sponsored benefits ?

Right.  The redistribution economy run amok.  Government directed theft from producers to non-producers both reduces the incentive to produce and increases the receive.  Every additional dollar transferred doubles this incentive/disincentive problem.  Each time one more person switches from contributing to receiving, we are two steps closer to an economy that will not support those in real need.  In the case of the US, we are already $19 trillion in debt, short of being able to pay our bills.

In the US, 27% of the people have full time, private sector jobs.  (I rounded up, using 2014 numbers.)

http://www.cnsnews.com/commentary/terence-p-jeffrey/86m-full-time-private-sector-workers-sustain-148m-benefit-takers

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DougMacG
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« Reply #406 on: June 13, 2017, 11:36:49 AM »

Written from a political perspective but quite telling about how things work economically.
http://www.realclearmarkets.com/articles/2017/06/12/the_democrats_new_economic_agenda_will_solidify_their_minority_status_102738.html

The Democrats' New Economic Agenda Will Solidify Their Minority Status
By John Tamny
June 12, 2017
 The Democrats' New Economic Agenda Will Solidify Their Minority Status
In a column from December of 2015, the Wall Street Journal’s Mary O’Grady unveiled a rather inconvenient fact that poverty warriors on the American left and right would perhaps prefer remain hidden: from 1980 to 2000, when the U.S. economy boomed, the number of Mexican arrivals into the U.S. grew from 2.2 million in 1980 to 9.4 million in 2000. The previous number is a clear market signal that the U.S. is where poverty has always been cured, as opposed to a condition that requires specific U.S. policy fixes.

O’Grady’s statistics came to mind while reading a recent New York Times column by Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. He writes that a “highly progressive agenda [from Democratic scholars and politicians] has been coming together in recent months, one with the potential to unite both the Hillary and Bernie wings of the party, to go beyond both Clintonomics and Obamanomics.” The problem is that the agenda that's got Bernstein so giddy has nothing to do with the very economic growth that is always the source of rising economic opportunity for the poor, middle and rich.

Up front, Bernstein expresses excitement about a $190 billion (annually) program that he describes as a “universal child allowance.” The allowance would amount to annual federal checks sent to low-income families of $3,000/child. It all sounds so compassionate on its face to those who think it kind for Congress to spend the money of others, but given a second look even the progressive and hysterical might understand that economic opportunity never springs from a forcible shift of money from one pocket to another. If it were, theft would be both legal and encouraged.

The very economic growth in the U.S. that has long proven a magnet for the world’s poorest springs not from wealth redistribution, but instead from precious capital being matched with entrepreneurs eager to transform ideas into reality. Just as the U.S. economy wouldn’t advance if Americans with odd-numbered addresses stealthily 'lifted' $3,000 each from those with even-numbered addresses, neither will it grow if the federal government is the one taking from some, only to give to others. Economic progress always and everywhere springs from investment, yet Bernstein is arguing with a straight face that the U.S.’s poorest will be better off if the feds extract $190 billion of precious capital from the investment pool. As readers can probably imagine, he doesn’t stop there.

Interesting is that Bernstein’s next naïve suggestion involves “direct job creation policies, meaning either jobs created by the government or publicly subsidized private employment.” Ok, but all jobs are a function of private wealth creation as Bernstein unwittingly acknowledges given his call for resource extraction from the private sector in order to create them. This begs the obvious question why economic opportunity would be enhanced if the entrepreneurial and business sectors had less in the way of funds to innovate with. But that’s exactly what Bernstein is seeking through his $190 billion “universal child allowance,” not to mention his call for more “jobs created by the government.” Stating what’s obvious even to Bernstein, government can’t create any work absent private sector wealth, so why not leave precious resources in the hands of the true wealth creators? Precisely because they’re wealth focused, funds kept in their control will be invested in ways that foster much greater opportunity than can politicians consuming wealth created by others.

Still, Bernstein plainly can’t see just how contradictory his proposals are; proposals that explicitly acknowledge where all opportunity emerges from. Instead, he calls for more government programs. Specifically, he’s proposing a $1 trillion expansion of the “earned-income tax credit” meant to pay Americans to go to work. As he suggests, the $1 trillion of funds extracted from the productive parts of the economy would lead to family of four tax credits of $6,000 in place of the “current benefit of about $2,000.” Ok, but what goes unexplained here is why we need to pay those residing in the U.S. to work in the first place.

What gives life to the above question is the previously mentioned influx of Mexican strivers into the U.S. during the U.S. boom of the 80s and 90s. What the latter indicated rather clearly is that economic growth itself is the greatest enemy poverty has ever known. It also indicated that work is available to those who seek it, and even better, the work available is quite a bit more remunerative than one could find anywhere else in the world. Rest assured that the U.S. hasn’t historically experienced beautiful floods of immigration because opportunity stateside was limited. People come here because the U.S. is once again the country in which the impoverished can gradually erase their poverty thanks to abundant work opportunities. If Mexicans who frequently don’t speak English can improve their economic situations in the U.S., why on earth would the political class pay natives who do speak the language to pursue the very work that is the envy of much of the rest of the world? Put rather simply, those who require payment above and beyond their wage to get up and go in the morning have problems that have nothing to do with a lack of work, and everything to do with a lack of initiative. Importantly, handouts from Washington logically won’t fix what is a problem of limp ambition. At best, they'll exacerbate what Bernstein claims to want to fix.

Most comical is Bernstein’s assertion that the tax credits will allegedly mitigate “the damage done to low- and moderate-wage earners by the forces of inequality that have steered growth away from them” in modern times. What could he possibly mean? The U.S. has long been very unequal economically, yet the world's poorest have consistently risked their lives to get here precisely because wealth gaps most correlate with opportunity. Translated, investment abundantly flows to societies where individuals are free to pursue what most elevates their talents (yes, pursuit of what makes them unequal), and with investment comes work options for a growing number. Doubters need only travel to Seattle and Silicon Valley, where the world's five most valuable companies are headquartered, to see up close why the latter is true.

Similarly glossed over by this rather confused economist is that rising inequality is the surest sign of a shrinking lifestyle inequality between the rich and poor. We work in order to get, and thanks to rich entrepreneurs more and more Americans have instant access at incessantly falling prices to the computers, mobile phones, televisions, clothing and food that were once solely the preserve of the rich. Just once it would be nice if Bernstein and the other class warriors he runs with would explain how individual achievement that leads to wealth harms those who aren’t rich. What he would find were he to replace emotion with rationality is that in capitalist societies, people generally get rich by virtue of producing abundance for everyone. In short, we need more inequality, not less, if the goal is to improve the living standards of those who presently earn less.

Remarkably, Bernstein describes the ideas presented as “bold” and “progressive,” but in truth, they’re the same lame-brained policies of redistribution that the left have been promoting for decades. And as they’re anti-capital formation by Bernstein’s very own admission, they’re also inimical to the very prosperity that has long made the U.S. the country where poverty is cured. To be clear, if this is the best the Democrats have, they’ll long remain in the minority.

John Tamny is editor of RealClearMarkets, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). He's the author of Who Needs the Fed? (Encounter Books, 2016), along with Popular Economics(Regnery, 2015)
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DougMacG
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« Reply #407 on: June 25, 2017, 07:26:13 AM »

With the collapsing cost of oil and information we need a new way of measuring productivity.

https://www.the-american-interest.com/2017/05/17/the-new-oil-reality/

It’s possible that the productivity increases are appearing as lower prices rather than as higher incomes. If the price of oil falls from $100 per barrel to $50 per barrel due to increasingly cheap and efficient methods of production, then everybody in the industry is more productive in terms of barrels of oil per hour of work, but since the oil price has gone down, that productivity increase won’t be captured by statistical methods that calculate productivity in terms of money.
...
The African villager with a solar powered smartphone has more access to more information than Louis XIV in the halls of Versailles.

« Last Edit: June 25, 2017, 05:16:35 PM by Crafty_Dog » Logged
Crafty_Dog
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« Reply #408 on: June 26, 2017, 01:11:26 PM »

http://www.latimes.com/business/la-fi-seattle-minimum-wage-20170626-story.html
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G M
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« Reply #409 on: June 26, 2017, 01:38:47 PM »


https://townhall.com/tipsheet/christinerousselle/2016/11/30/mcdonalds-to-install-ordering-kiosks-instead-of-paying-people-15hour-n2252849

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DougMacG
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« Reply #410 on: June 26, 2017, 02:39:32 PM »


The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.9290384225c1

And once again, "unexpectedly".
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Crafty_Dog
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« Reply #411 on: June 26, 2017, 04:46:58 PM »

Coming soon!  Government repeals Law of Gravity!
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G M
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« Reply #412 on: June 26, 2017, 04:58:50 PM »

https://www.facebook.com/Robots4MinimumWage/

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DougMacG
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« Reply #413 on: August 03, 2017, 11:50:25 AM »

Catching up on my Alan Reynolds readings this am.

https://www.cato.org/blog/compare-medical-college-inflation-services-not-goods

JULY 24, 2017
Compare Medical and College Inflation with Services, not Goods
By ALAN REYNOLDS

A Wall Street Journal report, “Colleges Pull Back Tuition’s Long Rise,” includes a graph showing the cumulative increases in consumer price indexes (CPI) since 1990 for College Tuition, Medical Care, and All Consumer Prices.

Adding up nearly three decades of increases looks dramatic, but doesn’t show when various prices changes accelerated or slowed. More important, prices for college tuition and medical care are dominated by skilled human services, so they should be properly compared with service prices in general rather than with all items.

All Consumer Prices (shown as an erratic black line in the graph) includes falling quality-adjusted prices for such tech products as computers and televisions, for example, and cyclically-volatile prices of internationally traded commodities such as oil, steel, and grain.

Service prices largely reflect wages and benefits for skilled labor, which (unlike commodity prices) almost never fall. If service prices did not increase faster than the CPI in general, then real compensation in service sectors could never rise.

See graph:  https://object.cato.org/sites/cato.org/files/wp-content/uploads/compare_medical_care_with_services_not_goods.png

Medical care prices compared to other services & CPI

This graph omits college tuition because that CPI item is particularly problematic due to averaging large differences in quality and “financial aid” (selective discounts from sticker prices). The Bureau of Labor Statistics explains some of the difficulties:

“The inclusion of financial aid has added to the complexity of pricing college tuition. Many selected students may have full scholarships (such as athletic), and therefore their tuition and fixed fees are fully covered by scholarships. Since these students pay no tuition and fees, they are not eligible for pricing. In addition, there are other students who pay a very small fee to the college since the majority of their tuition and fixed fees are covered by scholarships. When these situations are priced by BLS Field Staff, normal increases in tuition/fees and minor declines in scholarship awards can provide extremely large changes for entry in the CPI index. For some of these same quotes, minor tuition declines or minor scholarship award increases can actually result in negative prices, which make the quotes ineligible for use in the CPI.”

The graph compares two decades of year-to-year price increases for Medical Care and Services in general. The CPI for medical services alone (not shown in the graph) has actually increased somewhat less than the CPI for all Medical Care, which suggests prices of drugs and medical devices increased faster than physician and hospital fees. There have been major improvements in the quality of drugs and medical devices, however, and economists doubt the CPI adequately adjusts for quality improvement. As a BEA report notes, “If there are unobserved attributes that change over time (e.g. perceived efficacy or experience with the drug), these indexes will count any price increases associated with these changes as increases in price, not quality.”

Have Medical Care prices risen faster than Services prices in general? Yes, but the difference in annualized price increases was typically smaller than one percentage point except in 2002 and 2010, when recession’s aftermath depressed other services prices more than (heavily-subsidized) medical care prices.

Recessions’ impact on commodity prices pushed the year-to-year overall CPI below zero at times, which underscores the inaptness of comparing prices of medical or educational services to any price index such as the CPI which is heavily weighted by goods.
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DougMacG
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« Reply #414 on: August 14, 2017, 02:48:54 PM »

" It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. "

  -  by Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776

http://geolib.com/smith.adam/won1-02.html
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