The Ignorance of E.J. Dionne

I understand opinion writers are supposed to write opinions, but wouldn't you want to consult someone who knew something about the subject before displaying your ignorance in public?

EJ Dionne writing in the Washington Post makes the claim that "government works" citing as an example the bailout of auto companies by the federal government.

"In the end, taxpayers invested some $80 billion in the effort and recouped all but approximately $10 billion of that."

Let's think about this, Mr. Dionne (regrettably, after rather than before you wrote this).

1. If your investment advisor came to you and said he should be lauded for losing 12.5% of your money, would you do so?

2. To what other uses could that $80 billion have been put? If the government had not confiscated $80B from the private sector and directed it to the auto industry, isn't it likely it would have been invested in something that had a return higher than -$10 Billion?

I'm not sure whether to damn Mr. Dionne by pointing out his ignorance of opportunity cost or to assume he is knowingly trying to mislead his readers in order to make lame excuses for government economic malfeasance.

Fair and Balanced?

Well, at least the most fair and balanced according to a new Gallup poll.

More Guns Do Not Cause More Homicides

While economists understand that correlation does not mean causation, the chart below certainly doesn't support the progressive's position that the solution to gun violence is to reduce the number of guns available.

Update: Minnesota just reported that gun ownership in the state reached an all-time high, while violent crime reached 50 year low.  At some point even the HYSTERICALS have to acknowledge that the data does not support gun ownership being positively correlated to gun violence.

High Earners Will Shoulder Even MORE of the Tax Burden

According to the Joint Committee on taxation they expect tax filers with incomes of $100,000 and over to pay 79.1% of all Federal Taxes. As opposed to 78.7% now.

1. The media claim that this is a "tax cut for the rich" is a crock as usual.
2. People earning at least $100,000 will continue to pay a hugely disproportionate share of federal taxes because . . .
3. Lower income earners will be getting a larger percentage tax reduction.

It's Not Easy Being Green in the Northeast

The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort formed in 2012 among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions via the much-touted "cap and trade" mechanism. While to date nobody has claimed that this initiative has done anything to reduce global temperatures, it has clearly reduced the number of manufacturing jobs in those states. Since 2012, the number of manufacturing jobs is the United States increased 5.4% while the number of manufacturing jobs in the RGGI states fell by 3.8%. I guess that's okay with the people who created this cooperative. They don't work in manufacturing. 

Migration Follows what Economic Theory Predicts

North American Moving Services just released its annual US Migration Report for 2017 based on household moves from one US state to another last year.

It's pretty obvious what's going on here. People are moving away from Democrat-controlled, high tax, anti-business states to states that are Right-to-Work, Republican-controlled, high growth, business friendly, low tax.

Gosh, if only there some sort of theory that would predict these things.

What Homeschooling Tells Us About Government Schools

Don Boudreaux offers this analogy at Hayek

Imagine that the only source of professional haircutting is government-operated hair-care salons that are funded exclusively with tax dollars doled out directly to the bureaucrats in charge of each salon. Imagine also that each citizen can use a salon free of charge, but is assigned exclusively to the salon nearest to his or her home. If this were how professional hair-care specialists were organized and compensated, these specialists’ salaries would be determined not by competition and consumer choice, but by politicians. Hair-stylists’ workloads and incomes would then depend only upon their skills at political lobbying and uttering clever sound bites for the news media. No premium would attach to quality hair-styling skills. Hair stylists inevitably would lose much of their ability to cut and style hair as they focus their energies increasingly on protecting and expanding their special political prerogatives. More and more people would cut and style their own hair at home.

In 1980 only 10,000 children were schooled at home. Today that figure stands at about one million. This means that fully 2 percent of all children are now homeschooled. And this number continues to grow, even though public education is “free.”

It's The Economy (Again), Stupid

Presidents are seldom responsible for the performance of the stock markets, but this one is an exception.  Market prices are always roughly reflect the present value of future income streams, the expectation of which ratcheted upward last November with the election of a President who promised, and appears to be delivering, lower taxes and regulation for businesses.  Economic growth is driven by corporate profits and the reinvestment that devolves from those profits. We have experienced this twice before when President Kennedy and President Reagan cut tax rates. Democrats -- stuck with their Keynesian assumptions -- seem not to have learned this lesson. Or don't want to. It appears that they will come out in unanimous opposition to lower taxes and higher growth. A rather peculiar platform to run on.  Maybe they ought to remember what James Carville said during the Clinton years -- it's the economy, stupid.

The Fed Is Worried About Bitcoin??

Takes quite a lot of Chutzpah for the Federal Reserve to claim it is worried about BitCoin losing it's value.

It's Hard to Cut the Taxes of Those Who Don't Pay Any

Democrats are wailing that the current tax reform proposal doesn't cut taxes enough for The Poor. It's pretty hard to cut taxes on people who don't pay any in the first place.

The Rich Are Not Paying Their Fair Share

Democrats are right. The Rich are not paying their Fair Share of income taxes. They're paying more than everyone else's share.

Millennials Prefer Communism. Really?

According to polling firm YouGov, Americans currently between the ages of 18 and 29 have a more favorable view of Communism/Socialism than they do of Capitalism.

Why? Below is a chart from 1991 showing GDP per capita in geographically matched countries. The ones on the left were, at the time, Communist economies. The ones on the right were capitalist economies.

Millennials would really rather live under a system that robs people of 90% of their economic well-being? Or maybe they just enjoy being surrounded by poor people?

Another possible explanation would be that Millennials are grossly ignorant having been successfully indoctrinated by leftist ideologues who run our schools.

CO2 Reduction Isn't Really a Goal, Is It?

Liberals say they want reduced CO2 emissions. But do they? If they did, they would be applauding the chart below. Why aren't they? Because all of this reduction was accomplished by the free market exploring new sources of inexpensive natural gas that replaced a lot of coal in electric production.
The truth is that CO2 reduction is not really their goal. Their goal is to make conventional energy sources more expensive so that they can more easily justify their Utopian schemes using wind and solar energy. And create a new source of taxation to fund these schemes.

Fair Share of Taxes?

This chart from Professor Mark Perry.
1396 US taxpayers collectively paid far more income tax than 70 million Americans who paid the least tax.
And yet the constant drumbeat, "The Rich don't pay their fair share of taxes".
Darn right, it's not a Fair Share.

Middle Class Tax Cuts

The mantra in Congress today is "tax cuts for the middle class" -- as if that hasn't been going on for over 30 years. But remember, never let facts get in the way of a good emotional argument.

Citizen United Hysteria vs. The Facts

Remember how Democrats screamed that the Supreme Court's Citizens United decision would "unleash a tidal wave of corporate spending that would wash away your voice"?
Below are the Top 20 contributors to Super PACs in the 2015-16 election cycle. Not one corporation. In fact among the Top 40 contributors there is only one corporation (and 8 unions).

Economic Ignorance Encapsulated

I came across the chart below from the Cato Institute's Financial Regulation Survey.

It seems to me the perfect capture of the economic naiveté of the public. Anybody who has even a passing understanding of economics would understand making mortgages to more people with low credit qualifications will result in more defaults.

It wasn't in the study, but I'll bet you would get similar results for these questions:

Do you favor or oppose government raising the Minimum Wage?

Do you favor or oppose government raising the Minimum Wage if it meant there would be fewer jobs for low skilled workers?

Or maybe this one

Do you favor or oppose higher tariffs on goods from China?

Do you favor or oppose higher tariffs on goods from China if it resulted in higher prices for most things that you buy?

The illusion of a Free Lunch is still very powerful.

More Mindless Gun Control Hysteria

After the Las Vegas shootings we will once again have to endure the mindless calls for more gun control of some sort. My challenge is a simple one. If murders were related to gun ownership, wouldn't you expect to see a positive correlation between the two? Why would you advocate restricting the right to freely own guns simply to say you did something that has little likelihood of achieving your goal?

If you went to your boss and told him that you could make the company profitable if only he would fund big pay raises for the salesforce, do you think he would ask for empirical evidence to support that relationship? And if you couldn't provide that evidence, what do you think he should do?

The Anticipation Effects of Business Regulation

Don Boudreaux at Café Hayek points out that minimum wage regulation has long term pernicious effects because businesses anticipate that government will constantly raise the wage floor above the market price. This means that the impact of the Seattle minimum wage is not only the difference between $15 and the current market wage, but also the anticipation that an anti-business city council will continue to raise that number in the future.  In response to this, employers will today try to adjust their business models -- mainly though automation -- to accommodate not only today's wage, but the $20 or $30 that will surely come in a few years.

The Anticipation Effect extends well beyond wage floors. Just a couple of weeks ago Amazon made the decision to expand its headquarters outside the city of Seattle. They did this not only because of the anti-business actions the current city council has taken, but because it had become quite clear that they could expect a tsunami of onerous regulation in the future.

Businesses are forward thinking even if government is not.

The Michigan Comeback

The table below is courtesy of the Wall Street Journal.
What do suppose changed in 2011 that didn't change in Illinois?
The date coincides with when Republicans took over the legislature and the governor's office. More directly it coincides with the reduction in both business and individual tax rates and enactment of the Michigan Right To work law.

So the lesson is pretty clear. If you want to keep your slow growth, you can keep on giving control to Democrats. That's what the people of Illinois apparently want. The people of Michigan opted instead to give control of the state to pro-growth Republicans.