"The problem with socialism is you eventually run out of other people's money" - Margaret Thatcher
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design" - F.A. Hayek
Please view this night-time satellite photo of the Korean peninsula. We don't get results like this in economics too often. This photo is the purest natural economic experiment we could possibly hope for in a side-by-side test of the efficacy of markets versus command and control economics. And yet, the poor, misguided souls across the world and in the "Occupy This-or-That" movement continue to pathetically pout and grind their teeth for Marxism. Please, emigrate to Ghana and try your theories out there. And take the gold standard people with you. I am sure you will have much to talk about. Please keep your mental delusions to yourselves and your infected fingers off the future of my country.
Click on the above and you will see the impact of the 9-9-9 plan spread across income quintiles (that is every 20%). Notice that the lower 2 quintiles have their tax burden increase the most since...they pay few taxes anyway. In the end the average tax rate comes out to be pretty much proportional (that is the last column on the Table). The peeps in the top of the income distribution get their taxes shaved the most. Remember however this is a static analysis. Fundamental tax reform is one of our tickets out of the mess we are in. Something along these lines would be great although I doubt it would work with 9-9-9. What about 20-10-10 and exempt the lower 40%?
If president Obama were to suggest and adopt anything even remotely close to this or even were to push lightly for fundamental tax reform, he would take this issue from Republicans and win outright. But he can't do it. It is against his DNA and the mental shackle that captivates all Democrats believing that taxes going up on the rich is the only fair thing to do. It is a mental shackle that has them continually kick the economy when it is down and keep us where we are. But at least it serves to promote fairness right?
The puppy on the right is my new dog Sophie. She will be coming my way around December 1st. She is an English Springer and I am thrilled to see my newest hunting buddy.
...by following Misiu19 on Twitter. Go to http://twitter.com/#!/Misiu19 and hit the follow button! Then hit the cell phone icon right next to it. Viola! I'll be there! Thereafter all the posts will be instantly sent to your cell phone the moment they are published.
Many thanks to my young colleague Andrew Grodner for pushing me forward to be tech savvy.
WHICH WILL DO MORE FOR JOBS: MORE “STIMULUS” SPENDING, OR REMOVING GOVERNMENT BARRIERS TO GROWTH?
As an alternative to the continued “stimulus” spending and short-term fixes prescribed by President Obama, Speaker John Boehner and other Republicans in the U.S. House of Representatives have put forth a jobs plan focused on removing government barriers such as excessive regulation and taxation on small businesses that are impeding private-sector job creation in the United States. The White House contends there are no independent economists who believe this plan will have a positive effect on job creation in the short-term, and argues that it may actually “result in fewer jobs,” according to CBS News.
As an independent economist, which do YOU believe is more likely to provide a boost for private-sector job growth in America in both the near- and long-term: a plan focused on billions of dollars in additional “stimulus” spending by government – or a plan focused on halting excessive government regulations and fixing the tax code to help private-sector job creators?
If you believe the latter is more likely, we’d like to add your name to a list that will be released publicly by Speaker Boehner next week. Please respond to this email and let me know if we can add your name to the list. And feel free to share this message with other independent economists who may be interested in adding their names.
Justin Lampert Office of the Speaker Rep. John Boehner (R-OH) U.S. House of Representatives
The world is possibly facing the worst economic crisis in history, the governor of the Bank of England said Thursday.
Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession, the Daily Telegraph reported.
“This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.”
“The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed,” he said. “The world has changed and so has the right policy response.”
Read more on Newsmax.com: Bank of England Head: World Facing Worst Economic Crisis Ever Important: Do You Support Pres. Obama's Re-Election? Vote Here Now!
If you can hold your nose and get past the first part of the article where they have to beat every economic fact into a real business cycle interpretation, they have some great things to say about today.
Of course, not everyone is all that comfortable with the interpretation that the data have been given by Cole and Ohanian and for good reason. Why in the world the Real Business Cycle folks can't acknowledge the vast importance of the gold standard during the Depression is beyond me. Lee Ohanian has one sentence in one paper saying it would have helped the Depression if the Fed would have been more expansionary early on in 1930. I have waited for those words for some time.
As I have said in the past, I was at a conference and heard Ed Prescott say "all of this financial market stuff that people are worrying about is much ado about nothing." Well Dr. Prescott the men in the white coats are not far behind you...Welcome home Ed Prescott:
Click on this graph. What I have done here is create a graph of the future path of our GDP at two different rates of growth. One is at around 3% and the other around 2% and then let them compound for 50 years. Look at the difference. One economy is 50% bigger than the other. How many of all the entitlement promises we have made can we pay for in the future if our long-run rate of growth were to fall by 1%. Not pretty is it? Well this is what I fear most (other than the ghosts of my sordid past). Well, think of the top graph as the US economy between 1980 and 2008. Think of the bottom economy as France and the growth paths match up pretty well. Still think 1% doesn't mean much?
Demand one: Restoration of the living wage. This demand can only be met by ending "Freetrade" by re-imposing trade tariffs on all imported goods entering the American market to level the playing field for domestic family farming and domestic manufacturing as most nations that are dumping cheap products onto the American market have radical wage and environmental regulation advantages. Another policy that must be instituted is raise the minimum wage to twenty dollars an hr.
Demand two: Institute a universal single payer healthcare system. To do this all private insurers must be banned from the healthcare market as their only effect on the health of patients is to take money away from doctors, nurses and hospitals preventing them from doing their jobs and hand that money to wall st. investors.
Demand three: Guaranteed living wage income regardless of employment.
Demand four: Free college education.
Demand five: Begin a fast track process to bring the fossil fuel economy to an end while at the same bringing the alternative energy economy up to energy demand.
Demand six: One trillion dollars in infrastructure (Water, Sewer, Rail, Roads and Bridges and Electrical Grid) spending now.
Demand seven: One trillion dollars in ecological restoration planting forests, reestablishing wetlands and the natural flow of river systems and decommissioning of all of America's nuclear power plants.
Demand eight: Racial and gender equal rights amendment.
Demand nine: Open borders migration. anyone can travel anywhere to work and live.
Demand ten: Bring American elections up to international standards of a paper ballot precinct counted and recounted in front of an independent and party observers system.
Demand eleven: Immediate across the board debt forgiveness for all. Debt forgiveness of sovereign debt, commercial loans, home mortgages, home equity loans, credit card debt, student loans and personal loans now! All debt must be stricken from the "Books." World Bank Loans to all Nations, Bank to Bank Debt and all Bonds and Margin Call Debt in the stock market including all Derivatives or Credit Default Swaps, all 65 trillion dollars of them must also be stricken from the "Books." And I don't mean debt that is in default, I mean all debt on the entire planet period.
Demand twelve: Outlaw all credit reporting agencies.
Demand thirteen: Allow all workers to sign a ballot at any time during a union organizing campaign or at any time that represents their yeah or nay to having a union represent them in collective bargaining or to form a union.
These demands will create so many jobs it will be completely impossible to fill them without an open borders policy.
A List of their supporters: AFL-CIO (AFSCME) United NY Strong Economy for All Coalition Working Families Party TWU Local 100 SEIU 1199 CWA 1109 RWDSU Communications Workers of America CWA Local 1180 United Auto Workers United Federation of Teachers Professional Staff Congress - CUNY National Nurses United Writers Guild East
And:
VOCAL-NY Community Voices Heard Alliance for Quality Education New York Communities for Change Coalition for the Homeless Neighborhood Economic Development Advocacy Project (NEDAP) The Job Party NYC Coalition for Educational Justice The Mirabal Sisters Cultural and Community Center The New Deal for New York Campaign National People's Action ALIGN Human Services Council Labor-Religion Coalition of New York State Citizen Action of NY MoveOn.org Common Cause NY New Bottom Line 350.org Tenants & Neighbors Democracy for NYC Resource Generation Tenants PAC Teachers Unite
From the left: Jim Butkiewicz, Randy Parker, Jim Fackler, Bob Carpenter and Bob Hetzel. We had a turnout of about 80 good folks from the business and financial community of Greenville. Thanks so much for your support and I hope you had a pleasant experience. I am also going to post a webcast of this event as soon as I get it from the videographer.
I am a Professor of Economics at East Carolina University in Greenville, NC.
My research focuses on macroeconomics and economic history in general and the economics of the Great Depression in particular. I have authored two books, Reflections on the Great Depression and The Economics of the Great Depression: A Twenty-First Century Look Back at the Economics of the Interwar Era and edited The Seminal Works of the Great Depression. I am currently working on my fourth book Interwar Historical Antecedents of Modern Inflation Targeting and I am the co-editor (with Robert Whaples) of The Handbook of Major Events in Economic History and The Handbook of Modern Economic History.
I have also traveled the country giving speeches on the state of the macroeconomy and other economic issues to many trade and business associations. When I am not thinking about the economy I am either chasing ducks, handicapping horses or arranging a fine dining experience.
Lastly, the opinions expressed on this blog are mine alone and do not reflect upon East Carolina University in any way or manner, in whole or in part, now and forever more under the canopy of heaven.
