ECONOMICS: Anti-trust? Let Musk buy Twitter. It’d would be a hoot!

https://www.spiked-online.com/2022/04/15/why-elon-musk-has-rattled-them/

Why Elon Musk has rattled them

  • His attempted takeover of Twitter has revealed just how terrified the liberal elites are of freedom of speech.

Tom Slater Editor 15th April 2022

*** begin quote ***

We stand here on the edge of tyranny… Elon Musk wants to buy Twitter. That, roughly speaking, has been the commentariat reaction in recent days as the world’s richest man has launched a takeover attempt of the social-media giant, citing his concerns about its censorious policies as his main motivation.

Musk revealed last week that he had become Twitter’s largest shareholder, with a 9.2 per cent stake. Now he’s offered to buy the whole company for a cool $43 billion, a nice premium on its current worth. As it stands, Twitter’s board is resisting and America’s great and good have gone berserk.

The Washington Post’s Max Boot was swift out of the blocks. ‘I am frightened by the impact on society and politics if Elon Musk acquires Twitter’, Boot tweeted. ‘He seems to believe that on social media anything goes. For democracy to survive, we need more content moderation, not less.’

*** end quote ***

What better way to break up Big Tech than to have some “wild card” break in?

—30—

ECONOMICS: The economy has yet to recover from covid, but the stock market is being inflated

https://www.zerohedge.com/markets/nothing-has-changed-except-everything

Nothing Has Changed, Except For Everything
BY TYLER DURDEN
MONDAY, MAR 28, 2022 – 09:30 AM

*** begin quote ***

The signs and symptoms I’m paying attention to are as follows (read this list slowly, and take it all in):

  • We have a market that saw the NASDAQ (an index) rise about 120% in less than 2 years off its March 2020 lows, despite the fact that our economy never materially recovered during the same period of time.
  • Our money supply (M2) rose between 21.7% and 26.92% year over year, between April 2020 and February 2021. Its long term YOY average rise, including this data, is just 7.16%. Prior to 2020, most YOY growth was between 3% and 5%.
  • Our inflation rate is at its highest point in about 30 years, and that is using a totally different method for measuring inflation than we used to. If we used the standards for measuring CPI in the 1980s, inflation would likely be at all time record highs for our nation.
  • We have the most material hot war in Europe since World War II taking place, with little visibility on how it will end. At the same time, relations with Russia and China have not been this contentious in decades. Russia and China also look to be posing a serious, calculated challenge to the U.S. dollar’s reserve status.
  • As I pointed out days ago, stocks relative to GDP are also in uncharted territory, where reversion to the mean would mean a minimum of a 40% drop from here.

But hey, Jim Cramer says he thinks “the bear market is over”. He’s on CNBC. I’m not.

*** end quote ***

Hard to imagine what will happen when the politicians and bureaucrats have “managed” the US into a horrific depression.

Sigh!

It’s not going to be pretty for the non-rich.

—30—

ECONOMICS: There should NOT be any taxes on “Virtual Currencies”

https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies

*** begin quote ***

Virtual Currencies
 
Virtual currency transactions are taxable by law just like transactions in any other property. Taxpayers transacting in virtual currency may have to report those transactions on their tax returns.

What is Virtual Currency?

Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. In some environments, it operates like “real” currency (i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance), but it does not have legal tender status in  the U.S. Cryptocurrency is a type of virtual currency that utilizes cryptography to validate and secure transactions that are digitally recorded on a distributed ledger, such as a blockchain.

Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as “convertible” virtual currency. Bitcoin is one example of a convertible virtual currency. Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or virtual currencies.

*** end quote **

Sounds like they are defining “money”!

We don’t tax when “dollars” (i.e., Federal Reserve Note fiat greenbacks) are converted to Euros or visa versa.  So why are we taxed on “Virtual Currencies”?  For that matter, why are we taxed when buying gold or silver?  Doesn’t the Constitution define a “dollar” as an amount of gold or silver?

Argh!

Guess the IRS is going have a hard time finding all the non-custodial crypto wallets!!!

#endthefed 

If they can keep drugs out their prisons, how will the keep crypto out of a free society?

—30—

ECONOMICS: Inflation reduces real wages

https://www.theguardian.com/commentisfree/2022/feb/05/fed-raise-interest-rates-shaft-american-workers-robert-reich

The FED is about to raise interest rates and shaft American workers – again
Robert Reich — Sun 6 Feb 2022 01.00 EST

  • Policymakers fear a labor shortage is pushing up wages and prices. Wrong. Real wages are down and workers are struggling

*** begin quote ***

Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices – and that this wage-price spiral could get out of control.

It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.

There’s no “wage-price spiral” either, even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices. To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.

*** end quote ***

It’s a fact of life the at the FED’s 2% inflation target is a joke.  The FED has debased the currency of 99% of its value with its “2% target”!  But over and above that, the inflation has been robbing poor people, working slobs, and senior citizens on fixed income.

So maybe a good liberal like Reich might be enlisted into the “End The Fed” movement.

IMHO we need to go back to “real money” aka gold and silver.

Under hard money, prices go down and real wages go up naturally.

—30—

ECONOMICS: ‘The Great Reject’?

http://feedproxy.google.com/~r/zerohedge/feed/~3/0jJpXtjZ4no/atlas-shrugging-forget-great-reset-here-comes-great-reject

Atlas Is Shrugging: Forget ‘The Great Reset’, Here Comes ‘The Great Reject’
Zero Hedge by Tyler Durden

*** begin quote ***

It won’t work, and it brings to mind a particularly vivid example I once heard about a balloon disaster that still makes me cringe when I think of it:

A group of people were embarking on a balloon ride and as they were just a foot or two off the ground, the burner erupted into flames. The balloon pilot realized immediately what this meant and he leapt from the gondola which was still only a few feet off the ground.

One or two of the passengers were quick witted enough to realize what this meant and followed him. This set off a feedback loop: as the fire expanded, its hot air forcing the balloon higher, combined with the weight reductions as the first few people bailed out, the situation very quickly escalated past a point of no return.

The balloon had accelerated very rapidly to heights from which it was no longer possible to leap safely. The unfortunates who had hesitated and were trapped in a gondola being propelled higher by a fireball, to their inevitable doom.

That’s what our entire situation feels like today. The balloon is still hanging a foot or so above the ground, the canopy is on fire, and the people who have figured out what this means are bailing out while they can and in doing so they are accelerating the ultimate burn-then-crash of the entire system.

*** end quote ***

Economics is called the “dismal science” for a very good reason.

It’s based on the idea that ALL resources are scarce and there are “laws” that describe how resources are used

It’s “dismal” because rarely are there enough resources to satisfy everyone’s “wants”.  (Notice I didn’t say “needs” because that’s a much lower standard. (Think what passes for a “good life” in a Third World country and you’ll have my idea of “needs” versus “wants”.)

In today’s economic climate, the “wants” have outstripped our Gooferment’s ability to supply the resources need to satisfy them. (Note the tax  & borrow to spend  on “wants”.)

So like the balloon example above, get off before the disaster.

—30—

ECONOMICS: A “wealth tax” is tax on unrealized gains; not “income”

https://www.americanthinker.com/articles/2021/03/the_government_is_considering_a_financial_weapon_of_mass_destruction.html

March 25, 2021
The Government Is Considering a Financial Weapon of Mass Destruction
By John Klar

*** begin quote ***

In seeking to tax unrealized income from hyper-inflated capital assets, AOC, et al. are launching an aggressive, unconstitutional plan to destroy the national economy while growing government limitlessly.  Given her past pronouncements, she likely understands this travesty even less than she comprehends cow farts.

What is terrifying is not that AOC is calling for insane monetary policy and whole new means of tax takings.  What is terrifying is that almost no one is raising the fiscal alarm.

*** end quote ***

And, like the income tax, that started by impacting the top per cent, it quickly came down on everybody.

There’s no way that such a tax doesn’t destroy the economy’s “seed corn”.

The rich don’t have a basement full of bucks like Scrooge McDuck in their basement.  It’s spent or invested and EVERYONE benefits.

Argh!

—30—

ECONOMICS: The Gooferment is to blame for Texas’

https://www.washingtonpost.com/opinions/2021/02/18/texans-grid-outage-deregulation/

*** begin quote ***

Why Texans are cold and in the dark Texas’s predicament stems from a decision that state lawmakers made about 20 years ago to abandon the traditional model of fully regulated electricity utilities. Still used across many areas of the nation, these electric companies — described as vertically integrated utilities — do not compete for customers and are allowed to earn a rate of return on investment. They can raise rates only with the permission of state regulators. (Washington Post)

*** end quote ***

All the Gooferment’s fingerprints are all over this crisis.

—30—

ECONOMICS: Thought Experiments About the Minimum Wage

(Don Boudreaux) Tweet Here’s a letter to a high-school senior in Wisconsin who (I boast) reads Café Hayek: Mr. S___: Thanks for your e-mail. I share your negative opinion of Pres. Biden’s proposal to more than double the national minimum wage to $15 per hour.

Source: Thought Experiments About the Minimum Wage

*** begin quote ***

I’m sure that many of your classmates earn income by doing odd-jobs such as babysitting, mowing lawns, and shoveling snow. So ask them what they think would happen if government forced them to double the amounts that they charge to do these jobs. Do your classmates think that parents with young children will continue to hire as many hours of babysitting at (say) $30 per hour as they hire at $15 per hour? Will homeowners’ willingness to hire neighborhood kids to mow lawns be unchanged if the price of getting a lawn mown is forced up from (say) $25 to $50? Will neighbors be just as willing to pay (say) $40 to have snow shoveled off of their driveways as they are when they must pay only $20?

*** end quote ***

Here’s another thought experiment.

We know that few heads of households (I believe less that 1%) earn on the minimum wage.

Soooooo.

Cui bono.

It’s a well known fact that when you increase the bottom of the pay scale all the level on top of that pay grade have to go up too.

So it’s union workers, politicians, and bureaucrats that make out the best.  Obviously, the taxpayers are much worse off, as well as a consumers, as price increases ripple thru the economy.

Argh!

—30—

ECONOMICS: The death of the department store and the American middle class – Impact Lab

Department stores are also facing the reality that they are no longer the main way most shoppers discover or access new brands — which was once perhaps their main appeal as onetime innovators. Consumer brands have increasingly become focused on building connections with customers through their own stores, websites, social media platforms, and other online-only marketplaces. 

The death of the department store and the American middle class – Impact Lab

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Clearly, the handwriting is on the proverbial wall.

EVERYONE needs to reassess what this means in their own life.

My past advice seems to apply even more so now.

Success for your generation is: (1) ruthless financial discipline — no bad debt; (2) a life long interest in learning — education — a degree — they can’t take it away from you; (3) a NON-OFFSHORABLE white collar job in order to save big bux; (4) a blue collar skill for hard times — never saw a poor plumber; (5) one or more internet based businesses — your store is always open; (6) a free time hobby that generates income; and (7) a large will-maintained network of people who can “help” you.

—30—

ECONOMICS: Focus on the downside

Guns are a big part of my life… they make me money, they keep me safe, they encourage a particular set of values and lifestyle….but sometimes it gets difficult to remember that there are other aspects of preparedness that may actually be more paramount.

Source: Focus

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If someone asked me what to do to increase resilience for 2021 I’d say “Wargame a scenario where you lose your job and can’t find another one at all or at the same wage and prepare for that”. That means clear debts as quick as you can, and start holding cash. Sure, you’ll lose some to inflation but I don’t see a Wewimar-esque hyperinflation coming yet. If you want to hedge your bets, split it among cash and metals. Here’s what I wold not do: I would not buy big ticket items just because I can, I would not buy anything on credit, I would not plan any expensive vacations, and I would not plan on having kids (because do you really want to take the hit of three months without a paycheck  and have the added medical expenses and the additional stresses all at a time when things are so uncertain?)

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Yeah, it’s easy to be an optimist, and if you’re lucky, it’ll always work out for you.

But when planning for contingencies, assume the worst, and all surprises will be to the up side.

When as the Big Fat Old Turkey couselling Fat Old White Men, who were laid off or fearing for “their” job — even though “your job” is really NOT yours — I would urge them to figure out their “burn rate” of mandatory monthly expenses and depending upon their situation of age, education, savings, debts, and skills — hot in great demand or not — then realistically plan for how long they would be out of work.

Sometimes the answer was that they’d never get another job like their last one. It’s a brutal honest truth that comes to all of us sooner or later. (In my case, it was later; I’ve see some who just turned 50 and were stunned to be unable to find work at all.)

So a word to the wise, be prepared.  In this economy, an emergency fund of two years burn rate is NOT out of the question.

AND, YOU MIGHT NEED MORE.

YMMV.

—30—

ECONOMICS: Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11

Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11

Abha Bhattarai, Daniela Santamarina 5 hrs ago

Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11The coronavirus recession tipped dozens of troubled companies into bankruptcy, setting off a rush of store closures, furloughs and layoffs. But several major brands, including Hertz Global, J.C. Penney and Neiman Marcus, doled out millions in executive bonuses just before filing for Chapter 11 protection, according to a Washington Post analysis of regulatory filings and court documents.

Source: Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11

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I’ve addressed this “problem” before.

https://reinkefaceslife.com/2010/03/22/political-reigning-in-corporate-salaries-a-modest-proposal/

Since “corporations” are a Gooferment “creation”, the Gooferment can make the ROE (rules of engagement) for them.

Soooooo, turn the IRS loose on the “corporations”.

No corporation can pay an annual salary more than the President. (It’s unseemly and crude!)

And, corporations should be able to pay ANYTHING in the form of “tiered” of equal amounts over 25 years.

My reasoning is that we want to “encourage” long term thinking.

Having seen the GM “bankruptcy” where everyone made out well EXCEPT the taxpayers and the bondholders, we need to “fix” this.

By making the Board of Directors and “executives” compensated in 25 year bonds, the entire set of incentives and motivations will be changed radically!

Sigh!

… … so it will never happen … …

—30—

ECONOMICS: Low value routine work is the easiest target for robots

https://www.zerohedge.com/personal-finance/say-goodbye-millions-jobs-events-unfold

Say Goodbye To Millions Of Jobs As Events Unfold
by Tyler Durden
Sun, 10/04/2020 – 13:30
Authored by Bruce Wilds via Advancing Time blog

*** begin quote ***

Many jobs will not be coming back after the covid-19 crisis ends. We can say goodbye to millions of jobs as events unfold and markets evolve. Millions of small businesses being decimated by Fed policies that favor huge companies coupled with a surge in automation bodes poorly for those looking for work. Over the last three decades, robots have become far more common in factories. In many manufacturing facilities, robots do most of the work. A typical factory may contain hundreds of robots working on fully automated production lines, as it rolls by on a conveyor, a product can be welded, glued, painted, and finally assembled at a sequence of robot stations.

*** end quote ***

Unfortunately, the current and next generation are not prepared to move up the “value chain”.

That doesn’t necessarily mean more college degrees will save you.

The world will always value “poor plumbers”, good doctors and car mechanics, and entrepreneurial people who satisfy the needs of their fellow human beings.

The essential skill to have is to recognize that “the rules” are always changing and one has to be ready to ride the “wave”.

—30—

ECONOMICS: This will eliminate “rentals”?

https://www.economicpolicyjournal.com/2020/08/th-war-on-landlords-is-accelerating-how.html

TUESDAY, AUGUST 18, 2020
The War on Landlords is Accelerating: How Bad Will It Get?

*** begin quote ***

The idea of abolishing rent is not new, but until now it has never really been considered anything but a nutty pipe dream. But with the economic carnage wreaked by the virus and ensuing government lockdown still ongoing it has disturbingly come to be viewed as a conceivable policy option. With tens of millions out of work, the ability to pay for basic necessities like housing is obviously a valid concern, but the callousness of the idea of simply expropriating housing from property owners is disturbing and indicative of darker trends coursing through the body politic in these turbulent times.

*** end quote ***

Why would anyone be a landlord?

The Gooferment politicians and bureaucrats pandering to the mob to solve a “problem” that they created with their “stupid” or at least ill-considered policies.

Yet another example of — “The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren’t for the government, you wouldn’t be able to walk.” ― Harry Browne

—30—

ECONOMICS: Can’t criticize Marxism or its genocidal history

https://www.economicpolicyjournal.com/2020/08/economics-professor-isnt-allowed-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+economicpolicyjournal/YZSb+(EconomicPolicyJournal.com)

Economics Professor Isn’t Allowed to Open to All Students His Class Critical of Marxism

*** begin quote ***

A longtime economics professor at Wright State University, Professor Evan Osborne, who has repeatedly requested permission to teach a class critical of Marxism has been turned down by the university administration. Meanwhile, the university frequently offers courses that praise Marxism, Osborne told The College Fix.

*** end quote ***

Interesting that Nazism isn’t treated the same way.

No wonder the “yutes” have heads full of much.

Capitalism, would be better without the Gooferment, but it’s still the best of all the other choices.

—30—

ECONOMICS: Elizabeth Warren cheers AOC’s Green New Deal as she launches 2020 run | Daily Mail Online

The 69-year-old Democrat officially launched her campaign at a rally on Saturday in Lawrence, Massachusetts, one of New England’s poorest and most heavily Latino communities.

Source: Elizabeth Warren cheers AOC’s Green New Deal as she launches 2020 run | Daily Mail Online

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These SOCIALISTS are going to ruin the USA.

First, IMMORALITY “the rich” pay most of the taxes already.  How much more do they think they can pay?  If we think that tithing to God at 10% is holy, then what percentage doe the “god” of Gooferment demand.  IMHO, any tax is an immoral taking.

Second, INVESTMENT “the rich”, unlike Scrooge McDuck, don’t have a basement full of gold goins that they swim in.  They invest their wealth in productive higher order goods that improve productivity.  if the Gooferment takes that wealth, then where is the investment going to come from.

Third, WASTE the Gooferment already wastes so much.  It’s estimated, that for every dollar taken by Gooferment, more than half is wasted.  Over and above that, since the Gooferment produces little if anything of value for real people, why would anyone want to give them more wealth.

The SOCIALISTS want us to ignore the real world examples of East and West Germany, North and South Korea, Venezuela, the Stalin’s Russia, Mao’s China, Pol Pot’s Cambodia, Hitler’s Germany, and on and on through out history.  Countries that have been seduced by Socialism’s sirens song of “free stuff” have paid the price of death, poverty, starvation, and disease.  Capitalism may not be the “best system”, but it’s better than all the others that have been tried.

Argh!

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ECONOMICS: “Tax the rich” prevents “capital formation” and makes us all poorer

https://mailchi.mp/tomwoods/high-taxes?e=39307912ab

Tom Woods · PO Box 701447 · Saint Cloud, FL 34770 · USA 

FROM HIS EMAIL BLAST OF 2019-Jan-16 10:26PM

*** begin quote ***

Here’s my unfashionable opinion: I believe in tax cuts for the rich. (I believe in tax cuts for everyone.) I believe the rich are human beings with rights, and not cash cows to be milked by people who had nothing to do with the creation of their wealth.

Now what follows is just for you, and not for your social-democratic friends, who will listen to what I say and respond with, “That’s trickle down, which doesn’t work!”

Those people are anti-intellectual and can’t be reached. What I’m telling you here is for the sake of your own understanding, not theirs.

Here is how wealth is created, and why confiscating the incomes of high earners is so destructive.

When firms increase and improve the equipment and machinery at the disposal of workers, those workers’ labor becomes more productive. Imagine someone using a forklift (as my father did), as opposed to stacking pallets with his bare hands, or producing books with modern equipment as opposed to a 16th-century printing press. The amount of production the economy is capable of is thereby increased, often dramatically, and this increase in production puts corresponding downward pressure on consumer prices (relative to wage rates).

There is nothing natural or inevitable about the availability of this productivity-enhancing capital equipment. It does not fall out of the sky. It comes from the wicked capitalists’ saving, and the allocation of the unconsumed resources in capital investment.

This process is the only way the general standard of living can rise. Only in this way can the average laborer produce the tiniest fraction of what today he is accustomed to producing. It follows that only under these conditions can he expect to be able to consume the tiniest fraction of what today he is accustomed to consuming.

The increases in the productivity of labor that additional capital brings about push prices down relative to wage rates. By increasing the overall amount of output, such increases raise the ratio of consumers’ goods to the supply of labor. Put more simply, improvements in the production process that lead to an increased supply of consumer goods make those consumer goods cheaper and easier for people to acquire.

 

That’s why, in order to earn the money necessary to acquire a wide range of necessities, far fewer labor hours are necessary today than in the past. Thanks to capital investment, which is what businesses engage in when their profits aren’t seized from them and when savings are available to them to invest, our economy is far more physically productive than it used to be, and therefore consumer goods exist in far greater abundance and are correspondingly less dear than before.

*** end quote ***

And, he has a list of how productive has cut the “cost” of certain items in terms of the work hours needed to acquire them.  Very impressive.

“Tax the rich” is code for make everyone poorer by preventing “capital formation”.  Zero interest rates have wiped out savings by what’s left of the middle class.  If there is no “capital investment” because the “rich” are tax and unable to invest, then where does “capital investment” come from?  

I know “the money tree” that grows in everyone’s backyard!

Argh!

Today’s politicians and bureaucrats need to go to the figurative guillotine before the USA has its own version of the French Revolution.  Can these people possible be this stupid about economics?

I wonder.

TANSTAAFL (“There Ain’t No Such Thing As A Free Lunch” From Robert Heinlein’s classic) 

Or are they just blinded by their “power”?

Argh!

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ECONOMICS: Never thought of a cargo ship that way

http://www.economicpolicyjournal.com/2018/04/whos-we.html

SATURDAY, APRIL 14, 2018
Who’s the “We”?
Donald J. Boudreaux

*** begin quote ***

You’ll say that the “we” is Americans – to which I say that our capacity as Americans to make all these marvels has emphatically not been dismantled.  We do make them, sometimes directly and other times in a roundabout way.  But always we make them.  As the economist David Friedman points out, we Americans have an ingenious machine for transforming the corn that we grow in Iowa into automobiles that we drive.  That machine is called a “cargo ship.”  Into the ship we put corn and, a few days later, out of the ship comes automobiles.  We make cars by making corn.  This production process is akin to every other production process: mix various inputs together to produce something different and greater than the sum of its parts.

*** end quote ***

Now that’s an insight.

And the Gooferment should get out of the way of “we” filling up the outbound ships with “stuff”!

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ECONOMICS: Aren’t “tariffs” just taxes on “We, The Sheeple”?

http://www.foxnews.com/opinion/2018/03/07/john-stossel-mr-trump-if-raise-tariffs-on-steel-and-aluminum-punish-consumers.html

John Stossel: Mr. Trump, if you raise tariffs on steel and aluminum, you punish consumers
By John Stossel | Fox News

*** begin quote ***

No, President Trump, it’s not true that if you tax imported steel, we “will have protection for the first time in a long while.”

The opposite is true. If you raise tariffs on steel and aluminum, you punish consumers.

*** end quote ***

Isn’t this just a tax increase in disguise?

Maybe “We, The Sheeple” should subsidize the biggie whip makers?

Sorry, but tariffs are just stupid ekkynomics!

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ECONOMICS: Where does the minimum wage funds come from?

https://www.aei.org/publication/exposing-the-minimum-wage-fallacy-its-an-ironclad-law-of-economics-that-to-stimulate-one-group-you-have-to-un-stimulate-another-group/

Mark J. Perry@Mark_J_Perry
December 28, 2017 1:38 pm

*** begin quote ***

Exposing the minimum wage fallacy — it’s an ironclad law of economics that to stimulate one group (workers) you have to un-stimulate another group (businesses)

*** and ***

But here’s a question that never gets asked (or answered) by EPI and minimum wage supporters: Where will the $5 billion in additional wages come from? While thinking about this overlooked question that reveals an important economic fallacy, I was reminded of a similar economic fallacy illustrated by Henry Hazlitt’s famous essay on the broken window, which exposed the economic fallacy of the “blessings of destruction.” Using Henry Hazlitt’s essay as a template (which is actually based on Bastiat’s original essay on the broken window fallacy from 1850), I’ve written a new essay below to expose what might be called the “blessings of the minimum wage fallacy” on the eve of the 18 minimum wage increases schedule to take place next week.

*** and ***

Groups like EPI that support increasing the minimum wage do a great job of addressing the benefits of higher wages to low-skilled workers, but then completely ignore the costs of those artificial wage increases. That is, they never answer the most important question of all, posed above: Where will the $5 billion in additional annual wages from the 18 minimum wage hikes next year come from?

*** end quote ***

So why is raising the minimum wage different from the “broken glass fallacy”?

“We, The Sheeple” can’t think their way out of a paper bag!

Argh!

Watch the poverty increase!

For everbody.

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ECONOMICS: CVS eats AETNA?

Healthy Convergence 
CVS is in talks to buy Aetna for more than $66 billion, as the drugstore giant works to fortify itself against looming competition from Amazon while the health-care industry undergoes a reordering. In a sign of the seriousness of the talks, the companies’ chief executives have met multiple times over a period of roughly six months. CVS has made a proposal to buy the health insurer for more than $200 a share. With Aetna, CVS could lock in a huge number of members for its pharmacy-benefit management arm, as well as customers for its drugstores. That could bolster its leverage in negotiations with drugmakers, while its oversight of health insurance could improve its ability to strike new deals that tie drug prices to patient outcomes. If a deal were to be struck, it would be the year’s largest.

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Wow, pretty stunning!

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ECONOMICS: Seems like cost-savings will sweep the land of truck drivers?

https://www.theguardian.com/technology/2017/oct/10/american-trucker-automation-jobs

End of the road

*** begin quote ***

“Labor accounts for 75% of the cost of transporting shipments by truck, so adopters can begin to realize those savings. Beyond that, while truckers are prohibited from driving more than 11 hours per day without taking an eight-hour break, a driverless truck can drive for the entire day. This effectively doubles the output of the trucking network at a quarter of the cost. That’s an eight-times increase in productivity, without taking into account other benefits gained by automation,” he says.

*** end quote ***

Clearly, that efficiency will lower the prices of goods and services.

The human cost to individuals will be catastrophic.

As Jason Stapleton keeps saying: “You must invest in your own human capital.” 

The job you have today may not exist in a decade; adapt or die.

And, politicians and bureaucrats or “unions” can’t stop the “eight times increase in productivity”.

Sigh!

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ECONOMICS: Unless they are defended by the government, cartels always break down

https://www.garynorth.com/public/17188.cfm

The Economics of Assistant Coaches’ Bribery
Gary North – September 28, 2017

*** begin quote ***

There is a fundamental rule of economics: unless they are defended by the government, cartels always break down. They can be sustained only by government intervention. The government protects the cartels from members of the cartel who break the rules of the cartel in order to increase market share and thereby increase net income. The government makes cartel-busting a crime. In the case of the movie and also in the case of the latest scandals, net income is really what it is all about.

What we are seeing is the intervention of governments around the country to defend the NCAA’s cartel. If it were not for government intervention to keep coaches from paying full ticket for the valuable services of the best players, major universities would be forced to pay millions of dollars to these players, just as professional sports teams have to pay their players. A free market would prevail.

Top collegiate basketball coaches today are paid multimillion-dollar salaries. The head coaches don’t want to lose this income. In contrast, assistant coaches are not paid huge salaries. They are tempted to do under-the-table deals that are against the financial interests of the NCAA’s cartel. None of the coaches being accused of bribery is a head coach. No head coach is going to risk his $4 million annual salary for penny-ante payoffs to recruit top players.

If we had a free market in college education, there would be no legal restriction on the use of the word “college” or “university” imposed by any state on profit-seeking educational ventures. There would be no government money used to build sports stadiums. There would be open entry. Private college tuition would fall at all but the premier schools. College athletes in the top-ranked sports universities would be paid full ticket.

*** end quote ***

Ignoring for the moment that these alleged “bribery” charges may not — or should not be — considered  accurate, why do we have cartels in sports?

Why are the Taxpayers funding sports stadiums?

Why are the Team Owners (i.e., “State Universities”) allowed to keep “indentured servants” working (i.e., playing games) for them?

Argh!

We need to get the Gooferment out of all of there!

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ECONOMICS: Lessons Leaned from Kansas

https://www.bloomberg.com/view/articles/2017-06-19/the-kansas-supply-side-experiment-unravels

ECONOMICS
The Kansas Supply-Side Experiment Unravels
Tax cuts were supposed to spur growth, boost revenue and create jobs. The results were the exact opposite.
By Barry Ritholtz
June 19, 2017, 11:19 AM EDT

*** begin quote ***

When a governor announces an economic theory as a solution to a state’s fiscal problems, while challenging all comers to observe the results, that’s something I want to pay attention to. And so for the past five years, I have been watching the public-policy experiment in Kansas with great fascination.

With the state legislature now rejecting the governor’s experiment, we can move onto to the next phase: Not recrimination and blame, though there is lots of that going around. Instead, I want to look at how the experiment played out, and what lessons there are to be learned from it.

*** and ***

By just about every measure, Kansas’ economic laboratory experiment is now over, and the results are in. Supply-side tax cuts as executed in Kansas don’t generate more economic growth or create more jobs. They reduce tax revenue and forced the government to cut spending on essential goods and services like roads and schools.

*** end quote ***

I don’t think Ritholtz’s analysis goes quite far enough.

He doesn’t consider that “time” in his lessons learned.

It takes more than a generation to get folks to change. So a quick tax slashing with a large deficit spend is not how to spur the growth promised in the Laffer curve. It takes time to adapt.

Hence, the tax rate needs to be gently reduced over time with cutting waste and abuse. Then, strategic complete cuts to programs that are ineffective, and inefficient. With those savings either “banked for a rainy day” or returned to the taxpayer.

A one trick pony shot is not going to “fix” the decades of “training” that “We, The Sheeple” have in what Gooferment will do for them. 

Rigorous fiscal discipline, while not showy, will bring prosperity. 

IMHO this is needed at all layers of Gooferment.

Sad to say, but at one time, it could be found in both parties. Not any more in either.

Argh!

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ECONOMICS: Corporations do NOT pay taxes; only real people do

FROM THE WSJ

*** begin quote ***

TALKING POINTS
Tax talk. President Trump has ordered aides to draft a tax plan that slashes the corporate tax rate to 15%, even if that means a loss of revenue and exacerbating the plan’s procedural and partisan hurdles. Mr. Trump told his team to “get it done,” in time to release a plan by Wednesday.

*** end quote ***

For the life of me, I never understood that “We, The Sheeple” don’t understand what appears to me as “simple economics”.

When taxed, “corporations” have really ONLY two choices — pass them along or go out of business. 

Yes, I know that they could potentially reduce their profits, but let’s examine that concept. As Larry Kudlow says “Profits are the mother’s milk of stocks and the lifeblood of the economy.” When you reduce profits, you send signals to the economy that things are bad here. Then, the flow of capital dries up. Eventually, profits are zero and there is no incentive but to shut down.

So, taxes get passed along to the consumer. Lucky, real people get to pay MORE taxes.

What’s really bad is those taxes are HIDDEN in the priced of stuff we buy. Pick up any can of beans and tell me how much of that cost is taxes. It can’t be done. Argh! And, the politicians and bureaucrats just love it that way.

Then, want to know why corporations move overseas? The US tax rate on corporations is 30%. I think that’s the highest in the world. There’s the incentive to move. And, if you can’t move, that’s a reason to not go into business. 

Argh! Cubed!!!

Wake up people. The correct corporate tax rate is ZERO! Make the people aware of how much Gooferment really is costing us.

Argh!

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ECONOMICS: $78 trillion pension shortfall

https://www.lewrockwell.com/2017/03/no_author/worlds-first-pension-crisis/

The World’s First Pension Crisis
By Simon Black Sovereign Man
March 31, 2017

*** begin quote ***

In the late in the 5th century BC, the government of ancient Rome came up with a new idea that has lasted for thousands of years.

I’m not talking about their roads, republican form of government, or water sanitation.

Their bold idea was to start paying retirement benefits to Roman soldiers.

*** and ***

So just as the ancient Romans invented the first pensions, they also invented the first pension crisis. It wouldn’t be the last.

Most major governments find themselves in a similar position today.

According to a 2016 report from Citibank entitled “The Coming Pension Crisis,” the 35 developed nations which comprise the OECD (including the US, Canada, Japan, most of Europe, etc.) have pension shortfalls totaling $78 TRILLION.

To put this in context, $78 trillion is more than the size of the entire world economy.

*** end quote ***

Nothing like being a Gloomy Gus on a nice sunny day, but the nice thing about being a retired fat old white guy injineer who is a poor old senior citizen on a fixed income, I have the perspective to look back and forward. Past is prologue. 

I used to counsel my fat old white guys in job search. Part of that advice was to conduct the Sunday morning “board meeting”. Humorously, the jobseeker has to wear many hats. When I was one, I learned the trick at the DBM “turkey farm” of “wearing many hats”. So I, as the CEO, would turn to myself, as the CFO, and say: “How are revenue and expenses?”. Then the CFO would report. SO to with the CIO role, HR role, Sales Manager, Marketing Manager, etc. etc. At one time I think I had six or seven distinct “roles” in my job search.

One of my turkeys was so dense, I had to have him make paper hats with titles on them.

All that being said, there is a “retirement crisis” ahead. Probably not for me, but the younger you are the more positive I’m that you will hit it. “Pension shortfalls” equal to the world’s economy?

I can hear you say, but I don’t have a pension. But as taxpayers, you have to pay for public pensions, social security, and other “entitlements”. That’s even worse.

I hope that all you youngsters have a plan for when you’re my age.

Good luck.

p.s., sorry my generation has left you a mess to clean up.

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