Prosperity and Free Market Capitalism Are Utterly Linked

The linkage between classic liberalism (free choice, free markets) is so strong, it is a wonder that significant numbers of people -- e.g. virtually all the Democrat candidates for President -- want to move the US  in the opposite direction.  Are they just that ignorant? Or do they actually prefer lower living standards (as long as they get to make the decisions)?

Democrats' Welfare State Cannot by Paid for By The Rich (and they know it).

Heritage foundation makes the point that the sort of European welfare state that Democrats envision cannot be had without significant increases in taxation on the people who pay relative low tax rates today -- the middle class. Of course, Democrats cannot be honest about this because there is no support for raising taxes. The claim that all of this will be paid for by The Rich is simply a lie.

Taxes on the rich cannot raise the necessary revenue to fund large European-style welfare states. If left on the current trajectory, U.S. government expenditures will require large tax increases on middle-class Americans. The current progressive agenda to further increase spending on health care, education, environmental policy, and income supports will require even higher taxes on a larger share of taxpayers. If America’s spending continues to look more and more like that of Europe, U.S. tax policy will also need to shift. In European countries, lower-income and middle-class taxpayers pay an average marginal wage tax rate of 49 percent on income above $37,000 a year, and an average value-added tax (VAT) of 20 percent. Those same U.S. taxpayers face a marginal wage tax of 32 percent and an average sales tax of 6 percent. 

Your Income is Related to What YOU Do. Not White Privilege.

Mark Perry posted these two charts. It's almost as if your income level is more related to things that YOU do (or don't do) than racial issues. Or maybe Asians have some sort of Super White Privilege that they exert over ordinary Whites?

Minimum Wage Recession in Restaurant Employment

Mark Perry posted this chart showing that the effect of the increase in the minimum wage on labor demand is similar to what happens during full-blown recessions.  Too bad there isn't some sort of theory that would have predicted this -- that when you raise the price of something there will be less of it demanded.

Lower taxes and regulation=Rising wages.

To get growth in hourly earnings you need two things:

1. A tight labor (i.e. fewer people not working)
2. Employer optimism about demand

It's pretty clear that around 2017 something changed from the previous 8 years. My strong guess is that it was the election of a government that promised to lower corporate taxes and reduce regulatory burden. Any other guesses?

Want Lower Prices? Reduce Government Involvement.

Think medical care is getting too expensive? How about the cost of college? These are both categories in which the government is heavily involved and which get lots of government subsidies.
Now let's compare those to the costs of categories where the government is not as involved and where the free market generally sets prices. Huh. All of these have inflation adjusted decreases in price.
Huh. 

Income is Inversely Related to Unwed Births

Mark Perry has looked at the rather strong inverse correlation between having unwed births and household income. Clearly, the presence of a spouse adds to household income, so if you don't want to be poor, it's a bad idea to have children without marriage. Liberals, of course, fight this analysis because it does not fit with their conviction that racial discrimination by others is what keeps you from earning more. 

Educational Gaps Do Not Respond to Massive Government Spending

In a new paper researchers document that after 50 years of massive spending programs"gaps in achievement between the haves and have-nots are mostly unchanged over the past half century."
So why would you expect even more money to "solve" this problem? Isn't it more likely that there is something ingrained genetically or behaviorally that won't be erased by more of the same approach? 

Soak the Rich. Lower Marginal Tax Rates

The slogan Make The Rich (or the Tippy Top earners, to quote the au currant Alexandria Ocasio-Cortez) pay their Fair Share is repeated over and over again. But if that were your objective,  historical data (I know, not as persuasive as Feelings) would suggest that you do just the opposite of  what the Democrats want to do -- i.e. raise marginal rates of taxation. Would they really be happier going back to 1960 when the top 0.5% paid far less of the income taxes collected?

People Migrate Both To the US and Within It to Maximize Earning Potential

Just as people migrate from California, Illinois, Connecticut and New York to states like Florida, Texas and Arizona where they can earn more and be taxed less, so do ambitious people from foreign countries migrate to the US in order to maximize their earning potential. Asian countries in particular are suffering a "brain drain" of their most talented individuals. 

High Marginal Tax Rates Do Not Generate More Tax Revenue

The current media darling , Alexandria Ocasio-Cortez, was on TV yesterday telling Anderson Cooper that she would pay for all her lavish spending plans with higher tax rates on the "tippy-top" earners (didn't we used to mock Valley Girls?). But reality (as opposed to whatever is playing in AOC's head) tells us that revenues are not affected much by what the top marginal rate is. So what would be the point of a higher top tax rate? Other than to pander to people who are just as ignorant as you.

States of Change

One side effect of a strengthening national economy has been a widening disparity in state growth rates. The eight fastest-growing states by population last year were located in the West or South (Nevada, Idaho, Utah, Arizona, Florida, Washington, Colorado and Texas).

And what do you know? These states have also experienced rapid employment and GDP growth spurred by low tax rates and policies generally friendly to business and job creation. Nevada, Arizona, Texas, Washington, Utah, Florida and Colorado ranked among the eight states with the fastest job growth this past year, according to the Bureau of Labor Statistics. Nevada, Texas, Washington and Florida have no income tax.

And California is only experiencing growth because of foreign immigration (legal and illegal).

Will high-tax business unfriendly states learn anything? Doubtful. These states are dominated by the interests of unions and the Welfare Industrial Complex. Like other addicts, they will not change behavior until they hit bottom.  

The Myth of Declining Manufacturing the In the US

Michael Hicks published a paper which rightfully debunks the popular notion that manufacturing in America is declining. It is not. It has been increasing constantly over the last 100 years. 

Electric Car Subsidies for The Rich

Democrats voted unanimously against the last tax cut bill because (they said) it disproportionately benefits high income households. Yet they unanimously endorse electric car tax credits which (pretty conclusively) disproportionately benefit high income households. According to the Energy Department, 70% of all these vehicles are bought by people earning over $100,000.

ENVIRONMENTALISM IS A LUXURY GOOD 

The "Shortage of Women" in STEM Fields is FAKE NEWS

Mark Perry points out that the incessant cry from feminists and progressives that "there is a shortage of women in STEM fields" is not supported by the facts. That the news media is simply parroting the lie would make this a good example of Fake News, wouldn't it?

The Myth of Stagnate Incomes

If you've been listening to politicans a lot you probably believe that Americans' incomes are "stagnating". That, except for the fortunate few, hardly anyone is getting ahead.  If, instead, you listen to economists who research facts, you'd know otherwise. This chart is from data in a recent study released by the Congressional Budget Office.

The Myth of Stimulus Spending

Edmund Phelps. Nobel Laureate in economics, debunks the Keynesian notion that "fiscal stimulus" helps economies recover form recessions. If that were the case, countries that had larger debt (stimulus) would have recovered faster than those that implemented dreaded "austerity" budgets such as Spain, Portugal and France. Big deficits did not speed up recoveries. In fact, the relationship is negative, suggesting fiscal profligacy led to contraction and fiscal responsibility would have been better.

Yet, the next time we have a recession, count on the willfully ignorant in government and the media to call for more "stimulus".

60% of Households Receive More in Government Transfers than they Pay in Taxes

According to a report released this year by the Congressional Budget Office, only the top two income quintiles in the United States pay more in taxes than they receive in government transfers.  Fair share?

Factory Jobs Are NOT Coming Back, Mr. President

Those who think Donald Trump (or anyone else) is going to "bring back factory jobs" to America needs to study this chart for a moment.  I'm pretty sure The Chinese were not responsible for the declines prior to 1980. Nor those after 1980, for that matter.

How Socialism Destroys -- in One Chart

In this one chart from Mark Perry we see the power of capitalism to create economic activity and power of socialism to destroy it.