Filed under: Capitalism, Freedom | Tags: Income Inequality, The United States, The World's Rich and Poor
This graph, posted by economist Veronique de Rugy, takes a minute or two to understand, but there’s a lot of information here, and it’s worth your time. The graph shows inequality within a country— in the context of inequality around the world.
The horizontal line at the bottom shows the population of each country divided into 20 equal-sized income groups, ranked by their household per-capita income. This is divided into 5 clusters (or ventiles) each of 5 percentiles, similar to the way we customarily divide people in this country from ‘poor’ to ‘rich.’ So the entire population of a country is divided, by income, into 20 equal parts.
The household income numbers are all converted into international dollars adjusted for equal purchasing power, since the cost of goods varies from country to country. In other words the chart adjusts for the cost of living in different countries, so we are looking at consistent living standards worldwide.
The vertical axis shows where any given ventile from any country falls when compared to the entire population of the world.
Trace the line for Brazil, a country with extreme income inequality. The poorest 5 percent of Brazilians are as poor as anyone in the entire world,while at the other end of the Brazil line are some of the world’s richest people. This one country spans the entire range of world income.
See how the entire line for the United States falls in the top portion of the chart? The entire country is relatively rich. Americas poorest people are still richer than most of the world.
Compare with the line for India. India’s poorest correspond with the 4th poorest percentile worldwide, and India’s richest are in the 68th percentile, about where America’s poorest are, as a group. The bottom chunk of Americans, some of whom make as much as $6,700, amounts to a good standard of living in India where about a quarter of the population lives on $1 a day.
When it comes to income inequality, in America, there is relatively not all that much of it. For most people in the world, where you are born makes all the difference.
What do the poor most need? They need to stop being poor. And how can that be done on a mass scale excpt by an economy that creates more wealth? Yet the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists “somehow” and the only interesting question is how to re-distribute it.
(Thomas Sowell)The very fact that economists sweat over statistics purporting to demonstrate economic inequality in America proves that there is, relatively speaking, not much of it.
(Irving Kristol)
The chart comes from Catherine Rampell of Economix.
Filed under: Capitalism, Economy, Energy, Junk Science | Tags: Gas Prices, Obama, oil, Supply and Demand
If President Barack Obama were to schedule a major speech tomorrow, and tell the assorted networks that America was returning to oil production— he was lifting the federal bans on drilling—the price of oil would start dropping the next day.
- In 2008, Senator Ken Salazar (D-CO) refused to vote for any new offshore drilling. In a conversation with minority leader Mitch McConnell (R-KY), Salazar objected to allowing any drilling on America’s outer continental shelf—even if gas prices reached $10 a gallon. Obama named him Secretary of the Interior.
- In 2008, Steven Chu, head of the Lawrence Livermore Laboratories at U. of California Berkeley, told the Wall Street Journal that “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” he also said “We have lots of fossil fuel; that’s really both good and bad news. We won’t run out of energy, but there’s enough carbon in the ground to really cook us.” Obama named him Secretary of Energy.
- During the 2008 campaign, candidate Obama said “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.” And “So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them.” He was elected president.
I don’t know if Obama ever took a class in economics, but he seems to be totally unfamiliar with the basic laws of supply and demand. When supply is restricted, the cost goes up. When the cost of gasoline goes up, so does the cost of everything else.
Goods are transported by truck, and when delivery costs more, the price of your groceries cost more. When the government is busily printing money, the value of the dollar goes down. Oddly enough, the price of gas and the cost of food are not included in the government’s statistics on inflation. You have to keep track of that yourself.
President Obama speaks enthusiastically about his clean, green economy of tomorrow; but he doesn’t seem to understand that windmills and solar arrays produce only small amounts of electricity, which has little to do with transportation, and does not replace gasoline. Our transportation sector is powered by petroleum, and will continue to be powered by petroleum far into the foreseeable future. There is no alternative.
Why do I say that an Obama speech turning the energy sector free would start to bring down oil prices right away? Ronald Reagan did it, and George W. Bush did it. There is evidence. And the evidence that Obama’s clean, green government subsidized energy will prove to be an effective alternative — ever? Nonexistent.
Filed under: Foreign Policy, History, United Kingdom | Tags: British Tradition, Prince William and Kate Middleton, The Royal Wedding
There is much talk on the talk shows about the wedding of Prince William and Kate Middleton. Some Americans are offended that other Americans pay attention. Many husbands find it obnoxious that their wives love the romance of a royal wedding. Their wives find their husbands’ callousness obnoxious. Lots of people just don’t get the fascination. The media wallows in fascination. So there you are.
I find it interesting. The British like their royalty, except for those who don’t. Many assume that the royals are empty, vapid characterless folk. It takes courage and fortitude though, to perform kindly at constant appearances, charity functions, to endure elaborate ceremonies, and to pretend to enjoy long state dinners with other heads of state. It cannot be an easy life, and they have no real choice. It is the role that they were born to. Despite the trappings, I can think of a lot of things I’d rather do.
When you are just a rich celebrity, you can be rude and do pretty much whatever strikes your fancy. If you go too far, you may have to pay the price. Royalty cannot do that.
I like the spectacle. The British have a long tradition of spectacular ceremonies, and they do it all very well. It’s fun to watch. I wish the young couple well and hope they can find happiness in the formal lives they must perform. But I’m not caught up in illusions of fairy tale romance, and I won’t stay up half the night to watch.
I like English history, which is partly my history, though many generations removed. I’m a mix of English, Scots, Welsh, German and Dutch with a stray Norwegian and a Frenchman thrown in, way back. And I had a good many ancestors who fought against the British, twice.
For an explanation of the difference between the United Kingdom, the British Isles, Great Britain and England, don’t miss this brief but enlightening tour. For an earlier British ceremony when King George III rode to address Parliament on the distressing issue of war in America in 1776, see here, with a picture of the royal coach as well.
Enjoy the spectacle or ignore it, but refrain from being rude about the whole thing. That gets a little tiresome.
Filed under: Foreign Policy, Islam, Middle East | Tags: Bashar Assad, Hillary Clinton, John Kerry, Nancy Pelosi, Obama, Syria
In Syria, the Assad regime made a fateful decision this week. They used their army —even including tanks —to kill civilians protesting peacefully. Bashar Assad made the decision that it was better to kill hundreds of unarmed Syrian citizens than to risk the fall of his regime. This is the man whom Nancy Pelosi, John Kerry and Hillary Clinton thought was a peaceful reformer. As Elliott Abrams says:
In Syria and Lebanon, there is confusion about the American position. Many believe we are Assad well-wishers, and certainly Obama’s policy for 2009 and 2010 lent credence to that view. Now, the administration is coy: It talks of new sanctions but does not impose them yet. It talks of U.N. action but it is the U.K. and France that introduce the resolution, not the United States. It will not recall the U.S. ambassador who was so foolishly dispatched to Damascus late last year.
Two weeks ago, al Jazeera turned against Assad and is doing what it did in Egypt — broadcasting whatever it can get its hands on about the brutality of the regime and the courage of the protesters. The Amir of Qatar owns the station.
Syria is closely allied with Shia Iran, and with Hamas and Hezbollah, but the Syrian population is 74 percent Sunni. If the Alawite regime were to fall, it would be widely interpreted as a step toward the fall of the ayatollahs, so what happens in Syria is hugely important for American interests in the region. The president is, um, testing the wind, thinking about sanctions. He could recall our ambassador. He could pressure Turkey very hard to distance itself from the regime. He did say that Mubarak and Quaddafi must step down, he hasn’t even suggested that Bashar should.
He did issue a travelers’ warning.
Filed under: Capitalism, Economy, Energy, Statism | Tags: EPA Bans Drilling, President Prefers Windmills, The Price of Gas
Coming home this afternoon, the Shell station near my house posted regular gas at $4.01. That 1¢ is interesting, isn’t it.
After five years and four billion dollars, Shell Oil Company thought they were close to bringing in the estimated 27 billion barrels of oil waiting to be tapped in the Arctic Ocean off the coast of Alaska. One would assume that was a good thing. The Environmental Protection Agency is withholding the necessary air permits because of a one-square-mile Innuit village of 245 people a mere 75 miles from the drilling site.
Fox News’ Dan Springer reported:
The EPA appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.
“What the modeling showed was in communities like Kaktovik, Shell’s drilling would increase air pollution levels close to air quality standards,” said Eric Grafe, Earthjustice’s lead attorney on the case.
Springer identified the people who made the decision:
The Environmental Appeals Board has four members: Edward Reich, Charles Sheehan, Kathie Stein and Anna Wolgast. All are registered Democrats and Kathie Stein was an activist attorney for the Environmental Defense Fund. Members are appointed by the EPA administrator.
In his weekly address on Saturday, President Obama said that “there’s no silver bullet that can bring down oil prices right away. But there are a few things we can do. This includes safe and responsible production of oil at home, which we are pursing.” Then he attacked the oil companies for the $4 billion in subsidies that they receive from the government. The oil companies are making too much profit, he thinks, and that has to stop.
Unfortunately, as usual, the words of the president’s mouth are unconnected to his actions. Permits are not being issued. Every kind of roadblock is being thrown in the path of oil companies ability to bring in our own oil. He claims to be for “safe, responsible production of oil” but the Obama administration has imposed a months-long moratorium on deepwater offshore drilling that has slowed domestic production and sent some seven drilling rigs off to other more friendly countries.
There may not be the proverbial “silver bullet” but history shows that removing the roadblocks to production helps the price to come down. The futures market is worried about all the turmoil in the oil producing Arab states.
Obama’s lectures on gas prices usually contain several myths. “We can’t escape the fact that we control only 2% of the world’s oil.” False. We have more than three times as much in the ground as Saudi Arabia. “Industry holds leases on tens of millions of acres both offshore and on land where they aren’t producing a thing.” In first 100 days, Ken Salazar cancelled 77 leases for oil and gas drilling in Utah. A year later he cancelled 61 more leases in Montana. “Last year…our oil production reached its highest level in 7 years.” Obama is trying to take credit for actions of previous administrations and production in the Dakotas where most drilling is occurring on private land. The EIA projects a decline in production of 220,000 barrels of domestic oil per day in 2011, and in 2012, 150 million fewer barrels in the Gulf of Mexico because of Obama’s policies to discourage or ban domestic drilling.
President Obama emphasized once again, his major theme:”Instead of subsidizing Yesterday’s Energy Sources, We Need to Invest in Tomorrow’s.” Except there’s no tomorrow in his pursuit of wind, solar, ethanol and electric cars. He’s funding a fantasy. But he has EPA activists to do his bidding.
ADDENDUM: In July, 2008, when world oil prices rose to $145 a barrel, President Bush ended the moratorium on offshore drilling by executive order. Oil prices began falling the next day. No silver bullet indeed!
Filed under: Capitalism, Economy, Freedom, History, Taxes | Tags: First Principles?, More Revenue?, Spending
When people start talking about billions and trillions, many people just don’t want to hear. They don’t understand the numbers, and they don’t want to be scared by something they don’t understand — big numbers.
The Big Budget Battle boils down to something very simple. Republicans blame the deficit and the national debt on spending. The government has done too much of it. The Democrats blame the deficit and the national debt on a lack of revenue. They just haven’t taxed enough — and they think the whole thing was caused by the Bush tax cuts anyway. James Capretta explains:
To Democrats, the solution to our budget problem has two components. First, massive and steady tax hikes, not just over the next few years but every year for the next quarter century to match the explosion in entitlement costs. Second, they want stiff government cost controls on the entire health sector, not just on public insurance programs.
For years, the only thing that stood in the way of Democrats’ securing these changes were unenlightened and intransigent Republicans. But when Democrats secured once-in-a-generation majorities in the 111th Congress, Republicans were no longer in a position to stand in their way. So Democrats took the opportunity not only to pass Obamacare — the largest entitlement expansion in two generations — but also to try to reshape the long-term budget picture according to their big-government vision.
The CBO has said the total tax increase over the next 10 years will exceed $800 billion. But Democrats were looking for a perpetual cash machine that would go beyond just a near term tax hike. They’ve returned to bracket creep. The tax hikes associated with ObamaCare — .0.9 % on wages and 3.8% on non.wage income — were sold as hitting only those with incomes over $200,000 and $250,000, but without indexing for inflation, more and more people will find themselves paying much higher taxes for Medicare. All you nice middle class folks may find yourselves classified as “rich ” before you know it.
The second part is giving the government a mandate to enforce limits on all spending for health care. Raising taxes and rationing care. But why are Democrats so desperately opposed to cutting spending?
Democrats’ success at the polls has always depended on giving things to people. Welfare, benefits, government health care, housing, tax credits, Pell grants, extended unemployment, school lunches, school breakfasts, the list goes on and on.Many of the ‘gifts’ don’t work out so well, but their intentions were good. Democrats believe that a good intention earnestly expressed is a policy.
Republicans success at the polls depends on principles. They ask you to believe in things like liberty, the free market, individual rights, competition, private property, low taxes, the Constitution, responsibility and American exceptionalism. They don’t promise to give you much of anything except opportunity and freedom to follow your dreams.
Democrats ask Americans to become ever more dependent. Republicans ask Americans to stand up to be counted.
Filed under: Capitalism, Democrat Corruption, Economy, Statism | Tags: Straw Men, The Price of Gas, Who Gets Taxed?
The average price of gas according to AAA is $3.86, nearly $1 more than it was a year ago. The president, in don’t-blame-me mode, laid out his own plan on Saturday. He said “You see people trying to grab headlines or score a few points. The truth is, there’s no silver bullet that can bring down gas prices right away.”
The president laid out his own plan for controlling prices: ending price gouging, and calling for an end to the $4 billion in federal subsidies for oil and gas firms. How ending subsidies would bring down prices is a complete mystery, but in line with the Obama genius for advocating the wrong remedy. I’m not sure who he thinks is “price gouging” but “speculators” — also unidentified— are the latest straw man.
“This is what politicians do when they want to do nothing, yet look like they are doing something, they appoint a blue ribbon committee , or go to the U.N., or assign some cabinet member to look into the problem and report back to the President —hoping that the issue will be forgotten by the time he reports back,” observed Tom Sowell.
Obama suggested last Thursday that his lagging poll numbers are due to the high gas prices nationwide. Budget? What budget?
He did imply in his budget speech that he would cut spending by $750 billion over the next twelve years. That’s sounds like more than it is— a little less that $63 billion a year. or about what the federal government borrows every eight days. The president does not want to cut spending. He wants more. More spending, a bigger government, and higher taxes.
In a speech to the Chamber of Commerce in February, President Obama said that “the role of government is to support the economic foundation by spending public money to improve transportation, education and communication systems.”
The public (53%) believe that the primary purpose of government is to protect individual liberties and freedom. Only 10% believe that managing the economy is the government’s primary role, and only 24% see the government’s role as insuring social justice. That’s a pretty big gap in understanding the nature and business of government.
Americans consistently believe in lower taxes and lower government spending. Yet Democrats are really pushing for more taxes for the rich. All the Democrat yammering about “tax cuts for the rich” during the Bush years seems to have convinced, at least the Democrats, that the Bush tax cuts involved an unfair tax cut for the wealthy. Everybody got a tax cut, and “the rich” got the smallest percentage cut of all.
If Congress imposed a 100% tax, taking all of the earnings above $250,000 a year, every last cent, it would yield the massive sum of $1.4 trillion. Sounds like a lot, but tit would keep the government running for 141 days. And who pays for the remaining 224 days? Corporate profits? Another 40 days. Well, lets just take all the net worth of America’s 400 billionaires — that gets us to the middle of August. And now that the billionaires are on the dole — you just took everything they had, you’ll have to chip in to provide for them.
The government has no money of its own. Revenue comes from taxation. And guess where the big pot of money is. The Middle Class! You didn’t believe Obama when he promised not to raise taxes on the middle class, did you? Maybe you should think hard about the desirability of cutting back on spending after all.
Filed under: Capitalism, Economy, Freedom, Taxes | Tags: Cutting Spending?, Increasing Revenue, What to Tax?
I’ll admit it. I can’t resist collecting examples of the liberal mind in action. Here in the northwest corner of the Left Coast, our legislature is always interesting. The left is remarkably dim about the laws of unintended consequences.
The state of Washington has pushed its citizens to buy electric vehicles through tax breaks and public-relations efforts as well as a hefty tax on gasoline (The state excise tax is the highest in the country, though in overall gas taxes, we are only 7th highest). Now the legislature has noticed that drivers of electric cars are not filling up at the gas station. They’re not paying their fair share of maintaining the roads.
After years of urging residents to buy fuel-efficient cars and giving them tax breaks to do so, now the Washington state lawmakers are considering a measure to charge them a $100 annual fee — the nation’s first electric car tax.
They haven’t passed it yet, but in the interest of fairness, should they then tax the hybrid owners $50 bucks a year? But what percentage of hybrid driving is electric and what gasoline?
We get a good percentage of our energy from hydro, and there is no likelihood of any new or higher dams. Our governor wants to get rid of our coal-fired plant. Liberals do not understand incentives or consequences. If they made the tax exactly equal to incentives and tax breaks, then we would be back to where we were before they started messing around with deciding just what we should drive.
Do you suppose that they will learn anything from such a conundrum?
