ECONOMICS: Lessons Leaned from Kansas

Thursday, June 29, 2017

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

Tuesday, April 25, 2017

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

Thursday, April 6, 2017

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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ECONOMICS: Consider “systematic externalisations of cost” by Gooferment

Thursday, February 23, 2017

http://ncc-1776.org/tle2017/tle910-20170219-03.html

Traditionalism and Free Trade: An Exercise in Libertarian Outreach 
by Sean Gabb sean@libertarian.co.uk
Special to L. Neil Smith’s The Libertarian Enterprise

*** begin quote ***

What is true of national distribution networks is also true at the level of international trade. British and then American control of the seas has made shipping safe from piracy. British and American control of the Middle East has externalised many of the costs of oil drilling and movement. British and American armed interventions stabilised less powerful countries for the sale of our industrial output, and then for the development of manufacturing industry in places where the local ruling classes could be bribed and assisted into making labour both cheap and docile.

These facts go far to explaining why Chinese apples undercut Kentish apples in Kent, and why it is worth concentrating the manufacture of virtually all electronic goods in a few coastal regions of China, and why most of the clothes we buy are put together in Turkish and Bangladeshi sweatshops. It goes far to explaining why, when I drive home every summer from the family trip to Slovakia, I share fabulously expensive motorways with lorries that pay a pittance per mile, and burn diesel at prices—even allowing for taxes—far below the real cost of extraction and transport, and that are carrying goods to places like Manchester and Leeds where once whole armies were employed in their manufacture.

In short, the manufacturing side of the globalisation that traditionalists denounce proceeds from a pattern of comparative advantage that makes sense only on the basis of systematic externalisations of cost.

*** end quote ***

I read this and was literally stunned.

He makes an excellent point that the USA Rust Belt was cause by Gooferment subsidies and interference in free trade. 

While no one likes pirates — except when Johnny Depp is one in the movies — the control of them to enable long distance free trade is a cost that should be absorbed in the competitive marketplace. When Gooferment steals wealth from the USA’s taxpayers to “protect freedom of navigation”, then they are subsidizing imports and exports.

Like the gas tax is impossible to “see” in the price of a can of beans, so to this “protection of sea traffic” is NOT reflect in the market price of imported goods.

That’s a STUNNING realization to me.

So to the Gooferment subsidization of ports, airports, and highways. You can’t see that in competitive purchase decision down at Walmart. If there was a “Made in America” TV, of course it would be at an absurd cost disadvantage because all the “costs” are not in the price tag. 

That’s the realization this article brought to me. 

Argh!

Another case of Gooferment causes the problem and then causes more problems “fixing” the original problem. 

Argh!

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ECONOMICS: Janet Yellen and the “FED” should go to the trash pile of history

Wednesday, February 1, 2017

https://dailyreckoning.com/91851-2/

POSTED JANUARY 25, 2017
Trump Missed His Biggest Chance to Drain the Swamp
BY DAVID STOCKMAN 

*** begin quote ***

Janet Yellen insists that she would serve out her full term (until January 2018) and has rather cheekily lectured Congress about the dangers of political interference with the central bank.

Oh, my.

Before December — after the election — the Fed spent the past year sitting hard on interest rates for no plausible reason whatsoever. The main reason was to perpetuate the stock market bubble and thereby ensure the election of Hillary Clinton and a perpetuation of the current Wall Street/Washington regime.
To his credit, Donald Trump called her out on this blatant political meddling during the campaign, calling it “shameful” and designed to keep the stock averages levitated through November 8th.

He was exactly right. Yet notwithstanding his shocking victory, Yellen has the temerity of a pot calling the kettle black. Her Keynesian-statist party has been rebuked by the American public, but the terminally grating school marm who occupies the big chair in the Eccles Building petulantly insists that her right to rule has not been diminished by an iota.

*** end quote ***

The Federal Reserve Bank is a misnomer. IT ain’t “federal”. It reserves nothing. And, it ain’t a “bank”. It is a private cartel of the elite banks run for their benefit and that of the entrenched politicians.

It’s designed to corrupt Americans and the world into accepting a unbacked fiat currency.

The benefit of a real gold standard is to restrict what the Gooferment can spend. Imagine if it couldn’t borrow and spend beyond what it could steal from the taxpayers. A lot less war and welfare spending, for sure.

Argh!

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ECONOMICS: The “invisible hand of the free market” makes life better for everyone

Tuesday, January 24, 2017

On Thursday, January 19, 2017 8:50 PM, I wrote:

http://www.usatoday.com/story/travel/columnist/hobica/2017/01/18/jet-lag-altitude-sickness-dehydration/96677564/

*** begin quote ***

In a study entitled “Effect of Aircraft-Cabin Altitude on Passenger Discomfort” in the New England Journal of Medicine, the authors write that people who “travel to terrestrial altitudes above 6,500 feet experience acute mountain sickness, a syndrome characterized by symptoms of headache, nausea, vomiting, anorexia, lassitude, and sleep disturbance.” The researchers call this “Acute Mountain Syndrome.” The ill effects are even more pronounced the older you are.

*** end quote ***

Laugh!

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Sharing with my Luddite friend this great and interesting news.

“Jet lag” is merely misdiagnosed “Acute Mountain Syndrome”!

Wow, what a finding.

The article says planes are being reengineered to eliminate this.

Great!

To which, he responds:

*** begin quote ***

Yeah, they will end jet lag because nobody will be able to afford to fly!

*** end quote ***

No, it’s the “invisible hand of the free market”. Improve or die. Serve your fellow man or starve. 
Look at commodes. At one time only the ULTRA ULTRA rich kings could have indoor plumbing. Now virtually everyone has it.

Same with cars. Clean water. Computers.

Only in Gooferment projects does the costs escalate and the results plummet.

When entrepreneurs risk their own money, progress happens. Because no one watches the store like the owner.

Economics 201.

Laugh!

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Seems so OBVIOUS to me, Sigh!

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GOVEROTRAGEOUS: I think the SF “building department” is useless

Wednesday, October 26, 2016

http://www.dailymail.co.uk/news/article-3865998/The-leaning-tower-San-Francisco-350-million-luxury-high-rise-Millennium-Tower-SINKING.html

The leaning tower of San Francisco: The $350 million luxury high-rise Millennium Tower is SINKING 

  • The Millennium Tower, in San Franciso, has already sunk 16 inches since it was completed seven years ago
  • The $350 million building has also begun to tilt –  and now has a six-inch lean at the top of the tower
  • Leaked documents show the city’s Department of Building Inspection and developer Millennium Partners were aware it was sinking faster than anticipated before it opened in late 2009 but didn’t make it public 
  • Engineers hired to assess the problem have said that it shows no immediate sign of stopping

By HANNAH PARRY FOR DAILYMAIL.COMPUBLISHED: 00:54 EST, 24 October 2016 | UPDATED: 03:35 EST, 24 October 2016

*** begin quote ***

Pamela Buttery noticed something peculiar six years ago while practicing golf putting in her 57th-floor apartment at the luxurious building. The ball kept veering to the same corner of her living room.

Those were the first signs for residents of the sleek, mirrored high-rise that something was wrong. 

‘What concerns me most is the tilting,’ says Buttery, 76, a retired real estate developer. ‘Is it safe to stay here? For how long?’

*** end quote ***

Wow, there’s a “engineering blunder” as Brother Austin Barry would say.

I assume that the lawsuits will begin immediately!

Feel sorry for anyone who bought one after it was discovered but before it became public knowledge.

Argh!

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