American Elephants

The Mysterious Results of Liberal Policies. by The Elephant's Child

uhaul-van-sizes-i14The people of the Left seem to have trouble not only with innumeracy, but also a general understanding of economics and free markets. In fact, every so often someone blurts it out,  their enemy is — capitalism. That gets a little awkward because the United States has long been a capitalist and free market nation.

Democrats hate corporations, though they happily use the goods that corporations create,  and enjoy the advances in our wealth and well being. They remain convinced that their policies will create a workers’ paradise where everyone is equal and there aren’t any more rich people lording it over everyone else, except for themselves, of course. Obviously someone has to control things.

So how is it all working out? Economist Stephen Moore reports that “new census data shows that day after day, month after month, year after year, people are fleeing liberal blue states for conservative red states.”

The top seven states with the biggest percentage increases in inbound immigration from other states are in order: North Dakota. Nevada, South Carolina, Colorado, Florida, Arizona and Texas. All of these states are politically red, except Colorado, which is purple.

Meanwhile, the leading exodus states, in percentage terms, are: Alaska, New York, Illinois, Connecticut, New Mexico, New Jersey and Kansas. These states, except Alaska and Kansas, are blue.

The American Legislative Exchange Council finds that nearly 1.000 people a day are leaving blue states and moving to red states. This is an immigration pattern that is changing the economic center of gravity in the country to the South and West.

IRS data shows the same pattern. They keep track of tax filers who move and the amount of wealth they are taking with them. And it is not an insignificant transfer of wealth. In 2013 Florida gained $8.2 billion in adjusted gross income from new arrivals. Texas  gained $5.9 billion. And five of the states who gained the most  don’t have an income tax: Florida, Texas, Arizona, Washington and Nevada.

Democrats simply do not understand why anyone would leave a blue state. The blue states offer higher minimum wages, pro-union work rules, higher taxes on the rich, generous welfare benefits, lots of regulations to help workers and the environment. Isn’t that the program that will lead to a workers’ paradise?

Stephen Moore said he debated the situation with NYT columnist Paul Krugman this summer, and Krugman’s explanation for the migration from North to South was that “air conditioning” had made the South more livable. Yet there’s a lot of in-migration to North Dakota, and that’s not for the air conditioning. Possibly high-paying oilfield jobs?

in the past decade, 1.4 million more Americans moved out of California than moved in. According to Thomas Sowell, at least one fifth of Californians pay at least half of their income for housing. You can  possibly rent a bunk in an apartment for $1500 a month. The drought continues, and thousands of buildings and some 300,000 acres have gone up in flames. The  problem, according to Governor Jerry Brown is fossil fuels. The wildfires, he says, are the result of cataclysmic climate change, and are only going to get worse. Foresters say it’s due to a century of fire suppression which has led to a huge buildup of vegetation.  I’d bet on the forest supervisors.

Unfortunately, the problems are the direct result of government policies. Once ordinary houses in Palo Alto are now selling for a cool million or two. The waters of the Sacramento River were flushed out to sea to protect a supposedly endangered  tiny bait fish, while farmers in the Central Valley were denied the water they had contracted for.

Liberals don’t understand the results of their policies. They can see that people and businesses are moving out, but the reason is a mystery. Some mystery!

Independent, Free, and Self-Directed, Or the Democrat’s Gulag? by The Elephant's Child

At Real Clear Politics (the Real Clear Policy sector) Sherzod Abdukadirov writes about “How Uncle Sam Uses Behavioral Science,” in Mr. Obama’s “executive order urging federal agencies to use behavioral science insights in designing government policies and regulations. The order argues that such insights have the potential to improve consumer welfare through better policy design.”

I wrote about this week or so ago, but I find I’m not ready to leave the subject. It’s straight out of the Marxist playbook, and you can talk about ‘nudges’ or ‘behavioral experiments’, but it’s just plain propaganda designed to make you do what the government wants you to do. No “consumer welfare” about it. If at first they don’t succeed, they will try a little harder.

The example used in Sherzod’s piece is from the Energy Department, with their “Energy Star” appliances. They boast about consumer savings which are supposed to justify the higher price of the appliances.

Unfortunately, the evidence marshaled by the agency for consumer myopia is highly dubious. For example, the latest standard for residential dishwashers promises consumers a savings of $3 over 15 years — it takes twelve years just to cover the higher up-front price — while the standard for clothes dryers delivers $14 in savings over 16 years, with the higher price covered after five years.

That DOE would declare consumers irrational for not chasing trivial, long-term savings defies common sense. And when one considers the fact that another objective for energy-efficiency regulations is to reduce greenhouse-gas emissions, it becomes clear that the agency’s motivation may have less to do with improving consumer welfare and more to do with hitting its environmental goals. The use of behavioral insights in policy opens the door for agencies to impose more stringent regulations that aim to advance the administration’s agenda rather than consumer welfare.

This is why everything that the EPA does to take further control of your life and options is cloaked in preventing childhood asthma. Or the noxious twisty lightbulbs or their expensive counterparts. Consider a federal department and you can probably come up with something intended to shut down your options and force you to do something you don’t want to do. Consider ObamaCare.

The Left wants control. They don’t want you to have the option of free speech if it disagrees with them. Obama just said that you couldn’t have freedom of religion if it opposes gay marriage. The federal government will put restrictors in your shower head so you don’t use too much water. Just think of what the feds have done to make driving a car more expensive.

Conservatives talk about freedom, but perhaps that is too broad a term. What we are really talking about is autonomy: the quality or state of being independent, free, and self-directing.  It’s the capacity of a rational individual to make an informed, un-coerced decision. Take away our autonomy and welcome to the Gulag.

The Department of Energy believes that paying more to reduce greenhouse gas emissions is a public good. We would suggest that the Department of Energy has not studied the science of carbon dioxide. The Department of Agriculture has ordered that we enrich factory farms by putting the corn crop in our gas tanks. Mrs. Obama has ordered that small school children eat what she tells them to, but because even little children prize their autonomy, they throw the food in the garbage.

Both Barack and Michelle Obama became lawyers. How can you study law in the United States of America and fail to understand the importance of freedom and autonomy? Did they never read the whole Declaration of Independence and the Constitution and not understand what it was about? Obama announced early on that the law was about empathy. And he has repeated that many times, emphasizing how important empathy is to him. Take another look at Dierdre McCloskey’s graph, and what personal autonomy has meant to America.

President Obama’s Legacy In 9 Simple Charts From The Federal Reserve. by The Elephant's Child

CP6eZ_CWsAAyWVe.jpg large(Click to enlarge)

Take your time, read the small print. The nine charts do not, of course cover everything. There’s still the Iran Deal, the mess in Syria, the Taliban’s success in Afghanistan, excessive regulation. It would be easy to chart another nine, and then another. But it is a start on an all too real record. Some Legacy!

Two Down, Fourteen to Go. by The Elephant's Child

I’m really troubled. The two most accomplished governors in the country have both suspended their campaigns for the Republican nomination. Rick Perry administered a state that created most of the new jobs in the country. Liberals predicted that Texas would go bust along with oil prices when they started to drop, but 2014 was the year that oil prices fell to $53 a barrel in December from more than $107 in June.

But Austin has little exposure to the energy industry, and business other than government is booming. Texas has no personal or corporate income tax, and job growth continues to soar. Texas is in the business of wealth creation, not redistribution.

Scott Walker shifted power from unions to workers, where it belongs. Wisconsin has outdone the nation on most economic indicators. The unemployment rate is lower than the national average, and improving. After four years of Gov. Walker, more Wisconsinites are employed and his policies are clearly working. Add in an attempt to recall him, death threats to his family, protests at his parent’s home, and the use of law enforcement as a political instrument in an attempt to undo election results. Above all, he clearly has a steel spine, something we have all been wishing for.

Well, sour grapes. Walker, perhaps rose to the top too soon,too fast, and the vast number of candidates, hostile unions determined to destroy him,  a liberal media that regarded him as the most dangerous man in the bunch — liberals will do anything to silence those who disagree, and someone who is successful in overturning everything in the original progressive state is very dangerous to the liberal agenda.

I expected some to drop out, but not my two favorites while the less deserving, hang on. It’s politics, and the unexpected usually happens.

ADDENDUM: I’ve read dozens of other commentary on Scott Walkers suspension of his campaign. The only satisfying answer, setting aside the snark, is that he entered the race on a vast wave of enthusiasm, and the campaign spent way too much money in the first weeks, and as yet people are just getting acquainted with the candidates, and not really ready to settle on a single favorite. The too much money spent too early wasn’t getting replenished that fast. He just ran out of money and poll numbers.

Economics Is Organized Common Sense by The Elephant's Child

From the Archives, 4/20/14

Economists Craig Newmark and AEI’s Mark Perry dug up Nobel economist Thomas Sargent’s shortest U.S. graduation speech ever. A simple list of twelve valuable economic lessons. The speech was delivered at his undergraduate alma mater University of California at Berkeley, May 16, 2007.

“I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.”

“Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.”

1. Many things that are desirable are not feasible.

2. Individuals and communities face trade-offs.

3. Other people have more information about their abilities, their efforts, and their preferences than you do.

4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.

5. There are tradeoffs between equality and efficiency.

6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.

7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.

8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.

9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).

10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.

11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).

12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.

That is a remarkably valuable short list. Pin it up beside the mirror in your bathroom so you can read it every morning until you know it by heart.

Here’s The Difference Between Republicans And Democrats Spelled Out Clearly! by The Elephant's Child

Here’s a post from the archives, from about the same time last year. I repost it because nothing essentially has changed.Treasury-Secretary-Jack-Lew-seeks-rational-budget-approach

Here’s the difference between Democrats and Republicans —clear and simple.

President Obama has nattered on about “Economic Patriotism” and what they call “Corporate Tax Inversion.” Some corporations are finding it to their advantage to locate their headquarters in a country with significantly lower taxes. Medtronic is acquiring the Irish company Coviden and moving its corporate headquarters to Ireland.

The problem is American corporate taxes — which are the highest, at 35 percent, among the advanced economies in the world. Not only that, but the U.S. also taxes the income that American corporations earn overseas — something no other country does.

Democrats are up in arms. How dare they pick up and move? It’s not even patriotic to not pay taxes in your own country. Democrats intend to make “Economic Patriotism” a major issue in the fall campaign. (Good Democrats all hate big business).

Treasury Secretary Jack Lew, who should know better, has advocated “anti-inversion legislation.” Democrats are afraid that if a few companies do this it will open the floodgates and all sorts of American companies will locate abroad. Corporations who operate in the United States would still pay taxes on all the income earned in the U.S. but they won’t be paying double taxes to a foreign country and to the U.S. That gets very expensive, very fast.

There is, of course a very simple solution. You cut the corporate tax rate back to a rate more in line with other nations — or, gasp, even below. Yes, this is a Republican thing. Republicans like to cut taxes. The result would be a burst of activity from business, hiring, expanding, growing. The economy might even actually recover. It is how we have recovered so quickly from past recessions when Republicans are in charge.

Burger King has purchased Canada’s Tim Horton chain of coffee and donut shops, and plans to move their headquarters to Canada, where tax costs will be 46.4% lower. Canada has lowered their corporate tax rate from 43 percent in 2000 to 26 percent today. How much tax revenue did Canada lose by the dramatic reduction in their corporate tax rate? None. The lower tax rate raises more money.

For Democrats, this simply does not compute.

Secretary Lew said the corporate tax moves would mean that “all other taxpayers —including small businesses and hardworking Americans—will have to shoulder more of the responsibility of maintaining core public functions that everyone, particularly U.S. businesses, depends on.” Sigh. This man is the Secretary of the Treasury!

Lew’s remarks, delivered at an event hosted by the Tax Policy Center in Washington, came the same day Bloomberg News reported that Sen. Charles Schumer (D-NY) will soon introduce a bill that would slash the amount of interest an inverted firm can deduct from its U.S. income from 50 percent to 25 percent.
That will fix everything. Cut their deductions. Maybe they will lay off a few more people, and Obama’s recession will go on and on and on.
When we are considering all the potential candidates for the presidency, don’t doze off when one of them talks about taxes. It’s one of the big reasons why the economy is still in the tank, and why none of Obama’s efforts will provide the new jobs that are needed.

Thanks, Obama! U.S. Drops to Number 20 In The Human Freedom Index. by The Elephant's Child
August 21, 2015, 8:20 pm
Filed under: Environment, Health Care, Freedom, Progressivism, Taxes, Capitalism, Regulation, Bureaucracy

The Cato Institute, the Libertarian think-tank, publishes an annual Human Freedom Index, ranking 152 countries in the world according to the level of liberty enjoyed by its citizens.

The index represents a broad measure of human freedom. which can be understood as the absence of coercive constraint. It uses 76 distinct indicators of personal and economic freedom in these areas:

Rule of Law
Security and Safety
Association, Assembly, and Civil Society
Size of Government
Legal System and Property Rights
Access to Sound Money
Freedom to Trade Internationally
Regulation of Credit, Labor, and Business

This reflects the degree to which people enjoy the freedom to engage in voluntary exchange and enjoy major liberties such as freedom of speech, religion and association. Also measures freedom of movement, women’s freedoms, safety and security and the rule of law.

Hong Kong and Switzerland top the list, followed by Finland, Denmark, New Zealand, Canada, Australia, Ireland, United Kingdom, Sweden, Norway, Austria, Germany, Iceland, Netherlands, Malta, Luxembourg, Chile, Mauritius —and finally, The United States at Number 20, followed by the Czech Republic, Estonia, Belgium, Taiwan and Portugal.

The U.S. was 17th in 2014. but think of EPA regulations, scheduled speakers disinvited, the government confiscating a big chunk of a raisin farmer’s crop, ObamaCare regulations, you might try tallying up the new constraints you have seen or felt. Swat teams breaking into the wrong house, Lois Lerner, the attack by the Left on anything connected to the South and it’s Civil War history. The attack on free speech has been not only notable, but widespread — things you cannot say. So we are at number 20 and declining. We talk a lot about the Left’s drive for increased regulation and increased control — and just look at where that’s got us!



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