American Elephants

QQQ: A Hint From Economist Daniel J. Mitchell by The Elephant's Child

“Rather than helping the poor, higher tax rates redistribute rich people.”

If you live in California, Washington State, Connecticut, New Jersey, or for that matter, any other state, you might remind your governors and legislators of this simple economic fact. You may have noticed that not many of them are up on their basic economics.

I added New Jersey to the list because of this!

Ten Is A Nice Round Number! by The Elephant's Child
From 2008: The More Things Change The More They Stay the Same

Why are lists of ten popular? Some factoids to keep one sensible.

  1. “Global Warming” hysteria was born and has its entire existence in predictions of future temperatures by computer models; models that have been unable to predict current temperature.
  2. Al Gore and the IPCC were jointly awarded the Nobel Prize, but it was not a science prize, it was the peace prize.
  3. There are no requirements whatsoever to be an ‘environmentalist’. There are more requirements to be a leaf blower or a dishwasher.
  4. Increases in carbon dioxide in the atmosphere follow increases in temperature, sometimes by as much as 500 or 600 years. Cause must precede the event.
  5. ‘Organic’ is a special term that may be used only for produce that is grown with manure as a fertilizer, and poisonous pyrethrums as a pesticide. It is a marketing ploy, not a guide to health or nutrition.
  6. The rich may get richer, as when Bill Gates or Warren Buffet earn more; but the poor do not get poorer. Zero remains zero.
  7. “The poor”may always be with us, but over time, they are not the same people.
  8. Ignorance of the past leaves one open to complete deception in the present and the future.
  9. The world takes particular notice of the flaws of America because we hang them out in public for all to see and comment on.
  10. History clearly teaches us that individual liberty, the essence of America, must be constantly defended from the encroachment of the state.

Obamanomics 101: Understanding How the Obama Economy Works by The Elephant's Child

The Great Obama Depression. by The Elephant's Child
July 2, 2010, 11:35 pm
Filed under: Capitalism, Domestic Policy, Economy, Progressivism | Tags: , ,

President Obama gave a speech to a town hall meeting in Racine,  Wisconsin this week. Straw men, not his fault, economy recovering, Recovery Act working, Bush’s fault, Republicans won’t help, stimulus worked, more straw men, border more secure than ever, not his fault, more straw men.  Promoting the “merits” of his stimulus bill, President Obama said:

Now, every economist who’s looked at it said that the Recovery [Act] did its job…The problem is, number one, it’s hard to argue sometimes, “things could have been a lot worse. Right?  So people kind of say, “Yeah, but unemployment’s still at 9.6 percent.” Yes, but it’s not 12 or 13 or 15.  People say “Well, you know, the stock market didn’t fully recover.” Yeah, but it’s recovered more than people expected last year.  So part of the challenge in delivering this message about all the Recovery Act accomplished is that things are still tough, they just aren’t as bad as they could have been..  They could have been a catastrophe.  In that sense [the stimulus] worked.

New claims for jobless benefits jumped last month by 13,000 to a seasonally adjusted 472,000.  The number of people continuing to claim benefits rose by 43,000 to 9.6 million.  The number collecting extended benefits fell by 376,000. Since unemployment figures count only those actively seeking work, the real number is said to be around 17 percent.

“Unemployment’s still at 9.6 percent.
But it’s not 12 or 13 or 25.”

Every economist certainly did not say that the Recovery Act did its job. Alan Meltzer, professor of economics at Carnegie Mellon, said in the Wall Street Journal yesterday “The administration’s stimulus program has failed.” as innumerable other economists have said.  Even Keynesian economist Jeffrey Sachs said that the stimulus failed.

Allan Meltzer added that “The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.  But they want new stimulus measures — which is convincing evidence that they too recognize that the earlier measures failed.”

Obama got somewhat of a chilly reception from world leaders at the G-20 summit over the past weekend when he pressed them to continue with spending to bolster the global economy. Many nations in Europe and elsewhere have had to grapple with their own debt crises, and have been forced to enact tough austerity measures.

In 1981, President Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending.  Recovery began about a year later.  After 18 months, the economy grew more than 9% and continued to expand above trend rates. The administration economists neglected the longer-term  consequences of their actions.

Economist Larry Kudlow says:

The economic power of business is the missing link in the faux debate that is now raging over spending and deficit policies. A brief look at the recent jobs report for June tells this story. After spending more than $1 trillion through so-called government stimulus, we are at best experiencing a grinding and anemic jobs recovery. Private payrolls are growing slowly. The workweek is again shrinking. And average hourly earnings have declined. The unemployment rate dropped to 9.5 percent, but that’s because 650,000 people left the labor force.

The economic power of business is the missing link in the faux debate that is now raging over spending and deficit policies. A brief look at the recent jobs report for June tells this story. After spending more than $1 trillion through so-called government stimulus, we are at best experiencing a grinding and anemic jobs recovery. Private payrolls are growing slowly. The workweek is again shrinking. And average hourly earnings have declined. The unemployment rate dropped to 9.5 percent, but that’s because 650,000 people left the labor force.

So what about all this stimulus spending? Well, it hasn’t worked.

Business, in order to hire, plan for the future, increase spending, needs more than vague hope.  They need some kind of certainty.  Right now, everything is up in the air.  There’s a new health care law, how much will it cost business? Nobody knows.  Will the Bush tax-cuts be extended? Will Congress enact new taxes?  What is in the new Dodd-Frank bill’s 2000+ pages and how will it affect business?  What new regulations are going to be imposed? Cap-and-trade would  be an enormous cost on doing business, will it pass, and what will it mean to business?  Are we in for a double-dip recession? How can a business, hoping to make a profit in an economy where everyone is reluctant to buy, reluctant to spend, know what to do?

Misdiagnosis of the problem, and a lack of understanding of the possible remedies has made the problem far worse than it needed to be. The far left blames “capitalism” for most of the world’s problems, but “capitalism” is simply the name Marx gave to the free market.

Unemployment is the problem.  Yet most policies adopted by the Obama administration increase unemployment.  Slapping a heavy tax on makers of medical devices means lower employment in that industry.  Unnecessarily shutting down all oil rigs in the Gulf creates huge unemployment as rigs leave the area.  Failing to take quick action to prevent oil slicks from reaching the coastline means unemployment all up and down the coast.  Requiring people to switch to CFL lightbulbs means that industry will take place in China.  Closing  federal lands to oil exploration means lost jobs. Putting too many regulations and taxes on business means businesses will move to somewhere where they are better treated. There are always consequences.

A Reminder: by The Elephant's Child
October 5, 2009, 11:53 pm
Filed under: Capitalism, Conservatism, Economy | Tags: , ,

From Henry Hazlitt’s Economics in One Lesson“You can’t raise living standards by breaking windows so some people can get jobs repairing them.”

Spinning the Numbers, by Your Government and Mine. by The Elephant's Child
August 7, 2009, 9:28 pm
Filed under: Capitalism, Economy, Progressivism | Tags: , ,

The much anticipated jobs report was released today.  247,000 more jobs have been lost, but “the rate of job loss has dropped from 9.5 percent to 9.4 percent”— because 422,000 quit looking.  This was heralded across the airwaves as a great sign of economic recovery.  This is known as spin.

The economy is still in the doldrums with 6.7 million jobs lost since December of 2007.  14.5 million are currently unemployed, with all sectors of the economy affected.

The president’s agenda, however, is focused not on jobs, but on passing, at all costs, a health care bill about which the biggest questions are how to pay for it, since the Congressional Budget Office has said bluntly that we can’t afford it.

Democrats are talking about a middle class tax hike (Robert Gibbs denies it, but they simply cannot squeeze enough money from “the rich” to pay for it).  They are talking about a value-added tax, which just raises the cost of everything.  They are trying to think of all sorts of things to tax, apparently unaware that people who do not have jobs aren’t able to pay a lot of taxes, and what taxes they do have to pay only harm them.

Democrats are also considering what taxes and mandates to inflict on employers, apparently unaware that raising the cost of doing business during a recession simply means more layoffs and more business failures.  But economics has never been one of the Democrats’ strong points.

And once they get the new airplanes approved, and the cash for clunkers out there to destroy the used car business, and the health care reform bill passed, then they want to pass a cap-and-trade bill which will raise not only the cost of energy, but of everything you buy.  They’re estimating that at something like $3,000 -$4,000 per household per year.

But you must take care, because they don’t want any criticism, and they don’t want to answer any unfriendly questions, and they especially don’t want to be told that they have to read the bills.

Wise Words From a Nobel Laureate by The Elephant's Child
July 29, 2009, 7:47 pm
Filed under: Health Care, Progressivism, Statism | Tags: , ,

Economist Greg Mankiw — whose blog I recommend unreservedly — posted this comment by the Nobel laureate Ken Arrow:

Oh, why health costs increase? The basic reason why health costs increased is that health care is a good thing! Because today there is a lot more you can do! Consider all these expenses that are diagnostic. Cat scans, X-rays, MRIs and now the proton-powered whatever-it-is. Something that is the size of a football field, cost $50 million, and has all sorts of diagnostic powers. A lot of these technologies clearly reveal things that would not be revealed otherwise. There’s no question about it. Diagnostics have improved. Technology has improved. You know, sending things through your blood stream to help in operations, instead of cutting you open. It’s incredible. But these things are costly. But for older people longevity is increasing by a month each year. Now, whether that creates other problems with retirement and social security is another question. But, nevertheless, preserving life is a good thing.

The Obama administration seems to have forgotten what health care is all about.  They think it is about power, and getting control of something that voters cannot do without.  It certainly is not about preserving life.  Free abortions are on the list, rationing care for the old folks is on the list, and (Page 354, Section 1177)  Government will RESTRICT enrollment of Special needs people.  I’d sure like to hear them explain that one.

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