Here’s a list of articles that I have been reading lately:
Libertarian law professor Richard Epstein’s column this week is about $4 a gallon gasoline: “Politicians should neither panic nor pander.”
“In The Wall Street Journal, Wonder Land columnist Daniel Henninger writes that in the president’s Sim City Economy, you really can make it up.”
Quoting from this essay, “The government expunges sacrifice, smooths the risk out of our economic lives, and protects us from the consequences of our actions. It is aggressively moving us away from the national entrepreneurial ethos, teaching dependency and changing our relationship to the state.”
Quoting from this article “…not even Forrest Gump could believe the logic of what Mr. Obama is trying to sell… To wit, that a) gasoline prices are beyond his control, but b) to the extent oil and gas production is rising in America, his energy policies deserve all the credit, and c) higher prices are one more reason to raise taxes on oil and gas drillers while handing even more subsidies to his friends in green energy. Where to begin?”
Banking analyst Meredith Whitney writes about unintended (negative) consequences of ill-planned and ill-timed financial regulatory reform, including the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD), overdraft protection (“Reg E”) reform, and Dodd-Frank (2010).
“In The Wall Street Journal, Potomac Watch columnist Kimberley Strassel writes that Americans are open to candidates of faith, but less so to any hint that they might impose their moral views if they’re elected.”
Amity Shlaes reviews the international empirical evidence on the relationship between economic growth and tax cuts and finds the following: “payroll-tax cut “no,” corporate tax “yes” and personal income-tax cut “yes”"…
“It’s all too easy to forget to calculate the impact of the cost of the safety net on the taxpayers who pay for it, an economist writes.”
“No. It probably won’t work anyway.”
Stanford economist John Taylor on Lehman and TARP!
“In The Wall Street Journal, Donald Luskin and Lorcan Roche Kelly write that following Germany’s lead, euro-zone nations are pursuing pro-growth reforms that Reagan and Thatcher would admire.”
Scott Burns, who has a weekly personal finance column in the Austin American Statesman, makes the same point here that I have made on numerous occasions – because of double taxation of dividends, $1 of corporate income is taxed at the corporate rate of 35 cents, leaving 65 cents to distribute to shareholders as dividends; since the personal tax rate on dividends is 15%, this means that 55 cents of the original dollar earned at the corporate level is left over – 45 cents of the original dollar has been taxed. Thus virtually anyone who earns taxable investment-related income – not just the Warren Buffetts and Mitt Romneys of the world – currently faces an effective marginal tax rate of 45%. This point seems lost not only on Buffett and Romney, but also the Obama administration which has recently proposed a 2013 fiscal year budget which would impose a minimum 30% rate at the personal level on the 1 percenters and 5 percenters and so forth – not sure offhand what the percentile ranking is these days for “rich” married households filing jointly with income of $250,000 … Anyway, doing the arithmetic, this translates into an effective marginal tax rate of 54.5% on investment-related income. Sounds like a job killer to me…
The (UK) Economist magazine warns of a “…real danger: that regulation may crush the life out of America’s economy.”
“A trifecta of rights denied.”
My favorite “grumpy economist” blogger (AKA University of Chicago professor John Cochrane) advises us to “…leave the roads, bridges, the poor and the environment out of the debate over higher taxes” since as a matter of fact, “The main function of our government is to write checks to middle-class and wealthy voters. And that’s the reason its finances are in the toilet.” Professor Cochrane backs his argument up quite impressively with data from a New York Times article entitled “Even Critics of Safety Net Increasingly Depend on It” (located at http://nyti.ms/ydOSR0)…
Sorry to disappoint “fans” of “stimulus spending” by the federal government. Here is the link to UCSD macroeconomist Valerie Ramey’s newest (January 2012) empirical study on fiscal stimulus. She uses quarterly (U.S.) data on variables such as GDP, private and public sector employment, taxes, defense spending, etc. for the past 70-80 years and concludes that on balance, “… government spending does not appear to stimulate private activity.”
Quoting from this blog posting by University of Chicago finance professor John Cochrane: “The Dodd-Frank/Fed approach seems to be “we don’t know what happened, really, so we’ll just regulate everything that moves.”"
“In The Wall Street Journal, Terry L. Anderson writes about environmentalists’ attempts to keep Texas ranchers from saving exotic wildlife that are threatened in their native African habitat.”
“The increasing role of the childless may already be shifting Democrats toward a post-familal secularism associated with Europe. But to address millennials, they need to craft a message that appeals to a demographic that looks like the current First Family.”