This seems about right!
The best response from Trump’s misguided view of trade comes from Milton Friedman, one of the greatest economists in American history. Let’s hear from both sides on this issue:
Import tariffs v. free trade, argued by Donald Trump and Milton Friedman.
Milton Friedman was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.
The Trump administration says a steel tariff will be announced in the next two weeks to preserve American industries. John Stossel says that won’t work.
This is an interesting tale. What do you do when the check doesn’t come and your rent is due? What do you do when it happens 6 months in a row and you now stand in eviction court? What do you say?
Poverty is real and it has real consequences. What will we say when it happens to us? What will we do?
It is way to easy to judge the poor. Get a job we say.
Jesus says ‘Come, you that are blessed by my Father, inherit the kingdom prepared for you from the foundation of the world; for I was hungry and you gave me food, I was thirsty and you gave me something to drink, I was a stranger and you welcomed me, I was naked and you gave me clothing, I was sick and you took care of me, I was in prison and you visited me.’ The point is clear, Jesus challenges us to help the poor.
And making the point again, Jesus says ‘But when you give a banquet, invite the poor, the crippled, the lame, and the blind. And you will be blessed, because they cannot repay you, for you will be repaid at the resurrection of the righteous.’
There is good news — Then Jesus looked up at his disciples and said: ‘Blessed are you who are poor, for yours is the kingdom of God. Blessed are you who are hungry now, for you will be filled. Blessed are you who weep now, for you will laugh.’ And Jesus says ‘The Spirit of the Lord is upon me, because he has anointed me to bring good news to the poor. He has sent me to proclaim release to the captives and recovery of sight to the blind, to let the oppressed go free, to proclaim the year of the Lord’s favour.’
I am cancer’ by Kevin Williamson – National Review: “‘My check didn’t come.’ Eviction court is not the saddest place in the world, but if you were taking a Dantean descent through the underworld of underclass despair and dysfunction, it would be somewhere around the fourth or fifth circle. … She is not the only person whose check didn’t come. The passivity and subjectlessness of these narratives is striking, and strikingly consistent. Domestic events happen. Checks come or don’t come. (Mostly they don’t.) Husbands are sent to jail, children are taken away by the clipboard-toting minions of Authority, disease descends. The money isn’t there. And, in the end, they are evicted. Bad things just happen, and, today, I am the bad thing that is just happening to one of these luckless and unhappy children of God. I am eviction, I am CPS, I am the check that didn’t come. I am diabetic amputation. I am cancer.”
Did you know that since 1970, the percentage of humanity living in extreme poverty has fallen 80 percent? How did that happen?
Jesus declared that we would always have the poor but challenged us to do something about it. Jesus, was not a capitalist. Jesus lived in a brutal dictatorship. Jesus challenges us to focus on wealth in God’s country not this one.
Arthur Brooks, president of the American Enterprise Institute, explains.
Script: The next time you hear someone complain about capitalism, consider this: The percentage of people living at starvation level poverty has fallen 80% since 1970. Before then, more than one in four people around the world were living on a dollar a day or less.
Today, it’s about one in twenty. This is the greatest anti-poverty achievement in world history. So, how did this remarkable transformation come to pass? Was it the fabulous success of the United Nations? The generosity of U.S. foreign aid? The brilliant policies of the International Monetary Fund and World Bank? Stimulus spending? Government redistribution? No. It was none of those things.
It was capitalism. Billions of souls around the world have been able to pull themselves out of poverty thanks to five incredible innovations: globalization, free trade, property rights, the rule of law, and entrepreneurship. Globalization means the ever-increasing ability to move goods, people, and ideas from one distant location to another.
Free trade is open access to markets and people from all over the world with few, if any, barriers. Property rights is ensuring that what belongs to you can’t be taken away on a whim by the state. The rule of law safeguards contracts, assuring that they will be respected and lived up to whether the deal is made in Peru or Poland. And entrepreneurship is the creativity of free people to dream up new products that we never knew we wanted or needed.
It’s worth noting that in places like East Asia, these five things were all made possible by the historic peace after World War II that resulted from America’s global diplomatic and military presence. Let me put this in a slightly different way: The ideals of free enterprise and global leadership, central to capitalism and American conservatism, are responsible for the greatest reduction in human misery since mankind began its long climb from the swamp to the stars. This remarkable progress has been America’s gift to the world.
So, if these American conservative ideals have done so much to lift up the world’s poor, you would think conservative ideas would be gaining strength every single day – everywhere. And not just gaining strength among conservatives, but also among young idealists, immigrants, minorities, and advocates for the poor—all embracing the principles of free enterprise and unleashing its power on behalf of the vulnerable. But this hasn’t happened. To the contrary, capitalism is struggling to attract new followers. Indeed, some believe it’s destined to fade away – just as it has in much of Europe. According to a Harvard Study, only 42% of young Americans 18 to 29 have a favorable view of capitalism.
What explains this discrepancy between the incredible results of capitalism and its popularity? Why does capitalism get such bad rap? One answer is simple: The defenders of free enterprise have done a terrible job of telling people how much good the system has done around the world. Capitalism has saved a couple billion people, and we have treated this miracle like a state secret.
According to a 2013 survey, 84 percent of Americans are unaware of the progress made against poverty worldwide. Indeed, more than two-thirds think global hunger has actually gotten worse.
Why do we want to remove statues and monuments? To understand it Walter Williams suggests that we need a review of the promises black and white liberals have been making for decades. What should we focus on? What will make a difference.
UPenn Professor Amy Wax and University of San Diego’s Lawrence Alexander were slammed by a group of 54 UPenn doctoral students and alumni as “promoting hate and bigotry under the guise of ‘intellectual debate'” in their piece titled, “Paying the price for breakdown of the country’s bourgeois culture,” published earlier this month by the Philadelphia Inquirer.
Here is the premise they argue for. Do you agree these values are important?
Neither Wax nor Alexander have wavered on their views despite the blowback.
“What the objections boil down to is that the bourgeois virtues are somehow racist, or somehow cause racism—contentions that I and my co-author expressly contest, of course. But if, indeed, bourgeois values are so racist, the progressive critics should be out there in the street demonstrating against them, stripping them from their own lives, and forbidding their children to practice them. They should be chanting, ‘No more work, more crime, more out of wedlock babies, forget thrift, let’s get high!’ … Of course, there’s little chance we’re going to see anything like that, which shows the hollowness, indeed the silliness, of the critiques.”
Alexander said he “would change nothing” about the piece.
“The charges of racism, white supremacy, etc. are, sadly, the predictable responses of those who can’t refute the claims we made. And those charges are laughable, given that I was a civil rights marcher and have a multi-racial family. But, of course, when you don’t have the facts on your side, you resort to calling names. Pathetic!”
Would a nationwide $15 minimum wage help or hurt American workers? Andy Puzder, former CEO of the parent company of Hardee’s and Carl’s Jr., explains.
Progressive politicians love to talk about raising the minimum wage.
It makes them sound caring, compassionate, concerned. They’re on the side of the worker, standing against the greedy employer.
The current call is for a national $15-an-hour minimum wage – more than double the current federal rate of $7.25.
A number of cities and states are already there – including New York, California, Washington D.C. and Seattle. Others are considering it.
The left casts the minimum wage debate as a war between employee and employer. But most business owners pay their workers as much as they can. Finding and keeping good people is the hardest part of any employer’s job.
I know. For 17 years, I ran CKE restaurants, the parent company for Carl’s Jr. and Hardees. Our company and franchised restaurants employed over 75,000 people, but, as with most retail businesses, our profit margins were razor thin.
Based on my experience, if we adopt a national minimum wage of $15, here’s what will happen:
1. A lot of people will lose their jobs or have their hours reduced. According to a 2014 Congressional Budget Office study, just a $10 minimum wage would cost half a million jobs as businesses terminate employees. Obviously, far more jobs would be lost at $15 an hour. To survive, employers would have to reduce hours even for workers who manage to keep their jobs. That’s a pay cut.
2. Businesses will close, and the jobs they created will disappear. A recent report from researchers at the Harvard Business School found that each $1 increase in the minimum wage results in a 4-10% increase in the likelihood of restaurants closing. An over $7 an hour increase, to $15, would be devastating not only for restaurants, but for small businesses and their employees.
3. Young people will lose that entry-level job opportunity. My first job was scooping ice cream at a Baskin-Robbins in Cleveland, Ohio in the 1960s. I was paid just $1 an hour. But it taught me valuable lessons – like the importance of showing up on time, teamwork, and presenting a happy demeanor to customers. No one can get that better job until they have their first job.
4. The cost of all workers will have to go up. If you hire a dishwasher at $15 an hour, your cooks will be unhappy with their wages. You’re going to have to pay everybody more, which increases labor costs across the board. That’s more pressure on profits. Too much pressure and you’re out of business.
5. Fewer people will open businesses. $15 an hour is a very steep hill to climb. Would-be entrepreneurs will do the math on labor costs and realize it’s just not worth the risk. This is a real cost to the economy that we can’t measure. A company that never exists never employs anyone.
6. Prices for everything will go up as businesses pass higher labor costs along to consumers. One of two things will happen: Either consumers won’t pay the higher prices and businesses will lay off workers or close, or consumers will pay higher prices and have less money to spend elsewhere. Either way, the higher minimum wage will represent a drag on the overall economy.
For the complete script, visit https://www.prageru.com/courses/econo…
The Federal government now owes over $20 trillion dollars to its creditors.
As you can see below, this is a massive problem no one seems to want to address.
I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements.”
Source: Thomas Jefferson
What does 20 trillion dollars look like in stacks of $100 bills?
Here is the video.
Congress and the White House have until the end of December to raise the national debt limit before the federal government is faced with the prospect of either not paying its bondholders on time or deferring other bills.
Here’s a primer on the U.S. national debt, the debt limit and interest payments on the nation’s credit line:
Sometimes the company leaves the employee and sometimes the employee leaves the company. There is a lot going on in the manufacturing sector.
“The manufacturing sector holds an important place in our political imagination — the common wisdom is that the nearly 30% decline in U.S. manufacturing jobs since 2000 was a key factor in Donald Trump’s rust-belt electoral success, for instance.”
“A subtext of this idea is that these manufacturing jobs are desirable, and American workers wouldn’t give them up easily. But according to analysts at the St. Louis Fed, the rate at which workers are quitting manufacturing jobs, rather than getting fired, has remained steady even as the number of jobs has fallen.”
“Why it matters: The trend today is that manufacturing workers are quitting their jobs at an accelerating rate, suggesting they’re leaving for better pay and working conditions in other fields. While the loss of manufacturing jobs has been devastating for many communities, it’s also true that many workers will leave manufacturing if given the chance.”
Milton Friedman was an American economist and statistician best known for his strong belief in free-market capitalism. During his time as professor at the University of Chicago, Friedman developed numerous free-market theories that opposed the views of traditional Keynesian economists. He received the Nobel Prize in 1978.
See Dr. Friedman address Bernie Sanders about poverty.
“The U.S. economy acquired an exclusive label [yesterday]: Recession-free for eight full years … the third-longest economic winning streak in American history” — AP Economics Writer Paul Wiseman:
Source: Axios AM –
What’s the best way to help people stuck in poverty get out of poverty? Arthur Brooks, president of the American Enterprise Institute, shows where conservatives and progressives differ.
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What’s the best way to help poor people escape poverty?
Progressives and conservatives have very different answers to this question, but before we explore those answers, let’s agree on this: Both progressives and conservatives believe that the government has a moral obligation to help those who, through bad luck or unfortunate circumstances, can’t help themselves. Here’s what a conservative icon, Nobel Prize-winning economist, Frederic Hayek, said on the subject: “There is no reason why, in a society that has reached the general level of wealth ours has attained, the first kind of security should not be guaranteed to all…some minimum of food, shelter, and clothing sufficient to preserve health and the capacity to work.”
Whatever the media might tell you, there isn’t a conservative out there who would not agree with Hayek’s statement. As I have documented in my book, Who Really Cares, when it comes to philanthropy and charitable giving, conservatives actually out-give progressives — by a lot. Where the two sides disagree is on the role the government plays – not in protecting the poor from poverty, but in lifting them out of it. Here’s a disturbing piece of data: On balance, since President Lyndon Johnson’s War on Poverty programs came fully online in 1966, the poverty rate in America has hardly budged.
That rate, as computed by the United States government, was 14.7 percent in 1966. And today? It’s 13.5 percent. The rate has fluctuated a few points up and down over the decades. The net result is just one percentage point of progress. And this is after the government has spent over 20 trillion dollars on poverty relief programs. 20 trillion dollars – the current size of the US debt — and the needle has barely moved. Now, it’s true that the official poverty rate doesn’t measure consumption.
These are some great questions that need to be asked about a disastrous idea that is gaining traction.
Judge Napolitano knows how to look at it.
My take? There should be no minimum. Let the market place do its job.
What if the latest craze among the big-government crowd in both major political parties is to use the power of government to force employers to pay some of their employees more than their services are worth to the employers?
What if this represents an intrusion by government into the employer-employee relationship? What if this consists of the government’s effectively saying that it knows the financial worth of employees’ services better than the employers and the employees do?
What if the minimum wage, now on the verge of being raised to $15 per hour everywhere in the land, is really the government’s using threats of ruin and force to transfer wealth? What if the $15-per-hour figure is based on a political compromise rather than on free-market forces or economic realities?
What if these wealth transfers will have profound unintended economic consequences and will negatively affect everyone?
Manufacturing jobs are fine. I think it is great that people have them and want them.
I have never had one. No one in my family has. None of my friends have. If they could be brought back, that wouldn’t help me or most Americans.
The real question is what is causing the decline in manufacturing jobs and is that, in the long run, a bad thing.
Should we be advocating for agriculture jobs? Look how many have been lost over the last 150 years. Who has stolen all the farm jobs?
For quite some time, manufacturing jobs have been falling. That will continue to happen. It happened in agriculture and the trend in manufacturing will not improve.
There is a lot of misinformation and misunderstanding about “trade deficits”. This is one of the simplest explanations I have read. Short but very understandable.
Before the political games proceed on the evils of trade, I think it would help to understand what it means.
Every purchase we make is trade. We trade to improve our lives and trade occurs only when both parties benefit from the transaction. Individuals and companies engage in trade; countries do not trade, as countries are just geographic areas with political boundaries.
Source: Articles: The Trade Deficit Myth
There is a lot that is misunderstood about trade and deficits. I find it sometimes dizzying. Who is right? Who can simplify it for me?
Walter Williams, a great economist, does a great job of helping me understand.
Here is what happens: When I purchase $100 worth of groceries, my goods account (groceries) rises, but my capital account (money) falls by $100. For my grocer, it is the opposite. His goods account falls by $100, but his capital account rises by $100. Looking at only the goods account, we would see trade deficits, but if we included the capital accounts, we would see a trade balance. That is true whether we are talking about domestic trade or we are talking about foreign trade.
We aren’t loosing jobs because of free trade. We are adding jobs in our country. The economy could be better but eliminating free trade won’t help that. It could substantially hurt it.
Ideas do have consequences.
Populism is generally hostile to the very idea of international trade, and NAFTA in particular has become a scapegoat for every economic ill since it was enacted on January 1, 1994, more than 22 years ago. Surely one of the reasons is that its creation was bipartisan: It was initiated by President George H. W. Bush and signed into law by President Bill Clinton. NAFTA was enacted by a bipartisan vote in the Senate (61 to 38) and the House of Representatives, where supporters included 132 Republicans and 102 Democrats. In hindsight, this means any politician can bash it. But the main reason seems to be that the public is incessantly misled into believing that the three-nation deal between Canada, Mexico, and the United States was some kind of “development deal” that aided Mexicans at the expense of American workers.
Will raising top tax rates cure income inequality? Of course, it absolutely will not.
Equality implies that everyone makes the same. If we think that is a good idea, we can just look to Cuba to see how that works. Not so well.
It is an assault on our freedom to say that someone else makes to much and we are going to forcefully take it away from them and give it to someone else.
Those who advocate raising tax rates to extract more revenue from the wealthy need to understand that the rich are different from you and me. They have better tax attorneys.
Is protectionism a good thing for America? Probably not. Free trade among countries is desirable. Of course, it should be fair as well but swinging to the side of protectionism seems dangerous.
The language of protectionism is also similar to the language of the 1930s where the Smoot-Hawley tariff extended the Great Depression. The great majority of economists then and ever since view the Act, and the ensuing retaliatory tariffs by America’s trading partners, as responsible for reducing American exports and imports by more than half. Not a great result to be sure. It is worth noting that both Reed Smoot and Willis Hawley were defeated for reelection in 1932, the depression had worsened for workers and farmers despite their promises of prosperity with a high tariff
It seems like Mr. Trump is a pretty competitive person. Why not allow the market to sort it all out? What is wrong with competing on quality and price. Years ago “Made in Japan” was not a good thing. That has changed. Competition made it happen.
After the recent spate of primary elections, many are saying that it is inevitable that Donald Trump will be the Republican nominee in the 2016 election. If Donald Trump were to become President and enact the policies he has espoused on the campaign trail — signature policies such as his call for China and Mexico tariffs (the latter to build his famous wall), those policies will be the biggest job-killer we have seen since the Great Depression. Bernie Sanders, also doing much better than anyone had expected advocates the same brand of protectionist policies.
Whether we like it or not, we live in a global economy now. A rock tossed into the pond has rippling effects on us in America. Can we all learn from our mistakes?
When trying to assess the global economic outlook, it is well to recall that at least four major economic policy blunders have been made over the past few years. Since it would seem highly unlikely that, over the year ahead, the global economy will succeed in dodging the economic consequences of all four of those policy mistakes. It would also seem to be imprudent for global policymakers to exclude the possibility that the consequences of more than one of these errors will be triggered within the next twelve months. That would all too likely have very untoward consequences for the global economic outlook.
Too poor to retire and too young to die — “Nearly one-third of U.S. heads of households ages 55 and older have no pension or retirement savings and a median annual income of about 19,000 dollars. A growing proportion of the nation’s elderly are like Westfall: too poor to retire and too young to die. Many rely on Social Security and minimal pensions, in part because half of all workers have no employer-backed retirement plans.
‘Eight in 10 Americans say they will work well into their 60s or skip retirement entirely. Westfall hadn’t planned to keep working. But in 2008, as the U.S. economy spasmed, she lost her home and tumbled out of the middle class. Today, Westfall is one of America’s graying nomads. Although many middle-class retirees ply the interstates in Winnebagos as a lifestyle choice, for Westfall and many others, life on the move is not as much a choice as a necessity… Her monthly income consists of 1,200 dollars in Social Security and a 190 pension, plus pay from her seasonal jobs. She owes 50,000 dollars on her credit cards. There’s also a 268 dollar monthly loan payment for her aging rig.”
It is interesting how, when it comes to numbers, we miss the basics. It is even more interesting, how politicians many times don’t get it either.
Three percent growth is not 1 percent better than 2 percent growth, it is 50 percent better. And you can extrapolate from there.
Of course, the best thing for the government to do is get out of the way. That has a huge economic impact.
If there is going to be growth-igniting tax reform — and if there isn’t, American politics will sink deeper into distributional strife — Brady will begin it. Fortunately, the Houston congressman is focused on this simple arithmetic: Three percent growth is not 1 percent better than 2 percent growth, it is 50 percent better.
If the Obama-era’s average annual growth of 2.2 percent becomes the “new normal,” over the next 50 years real GDP will grow from today’s $16.3 trillion to $48.3 trillion. If, however, growth averages 3.2 percent, real GDP in 2065 will be $78.6 trillion. At 2.2 percent growth, the cumulative lost wealth would be $521 trillion.
I hadn’t thought about it but people trade with other countries. I choose to buy a product made somewhere else. The government, for the most part, can only make that easy or difficult.
Some of the political obfuscation about foreign trade is lifted when we recognize that it is not really nations trading with one another. In other words, the U.S. Congress does not trade with the federal government of Mexico, England’s or France’s parliaments or Japan’s Diet. It’s individual Americans who, through private intermediaries, trade with: Mexican Ford manufacturers, English clothing manufacturers, French wine producers and Japanese automakers.
And this jewel from Jim Geraghty at the National Review. Do we really want a smaller government that spends less? The evidence seems to be against it.
Is it worth fighting for? Yes it is. The Tea Party seems to have moved on from this as it’s main objective.
COSTELLO: I want to talk about the unemployment rate in America.
ABBOTT: Good Subject. Terrible Times. It’s 5.6%.
COSTELLO: That many people are out of work?
ABBOTT: No, that’s 23%.
COSTELLO: You just said 5.6%.
ABBOTT: 5.6% Unemployed.
COSTELLO: Right 5.6% out of work.
ABBOTT: No, that’s 23%.
COSTELLO: Okay, so it’s 23% unemployed.
ABBOTT: No, that’s 5.6%.
COSTELLO: WAIT A MINUTE. Is it 5.6% or 23%?
ABBOTT: 5.6% are unemployed. 23% are out of work.
COSTELLO: If you are out of work you are unemployed.
ABBOTT: No, Obama said you can’t count the “Out of Work” as the unemployed. You have to look for work to be unemployed.
COSTELLO: BUT THEY ARE OUT OF WORK!!!
ABBOTT: No, you miss his point.
COSTELLO: What point?
ABBOTT: Someone who doesn’t look for work can’t be counted with those who look for work. It wouldn’t be fair.
COSTELLO: To whom?
ABBOTT: The unemployed.
COSTELLO: But ALL of them are out of work.
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed.
COSTELLO: So if you’re off the unemployment roles that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don’t look for work?
ABBOTT: Absolutely it goes down. That’s how it gets to 5.6%. Otherwise it would be 23%.
COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
COSTELLO: And unemployment can also go down if you stop looking for a job?
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to have people stop looking for work.
ABBOTT: Now you’re thinking like a Democrat.
COSTELLO: I don’t even know what the heck I just said!
ABBOTT: Now you’re thinking like Hillary.
There is a price to pay for everything. Who will pay this one? The federal government? Middle class Americans? The Chinese? The Brazilians? All of these and more is probably the answer. Hold on to your seat, it is going to be a bumpy ride.
You can’t plant corn and harvest grapes!
Now that the Federal Reserve has started the process of normalizing interest rates, the global economy is soon likely to learn that Fed quantitative easing was anything but a free lunch. Since while over the past few years quantitative easing might have provided much needed temporary support to a struggling US economy, it also has contributed importantly to an extraordinary number of financial vulnerabilities around the globe. Sadly, past experience would suggest that a number of these are likely to be triggered in the year ahead by a tightening in the interest rate cycle.
More and more we live in an open society. What was once difficult to know about a company is now open knowledge. Abuses are broadcast far and wide. The open market has a wonderful of correcting itself.
Who needs consumer watchdogs and the Better Business Bureau when you have the internet and Google or Bing?
The main justification behind local, state, and federal regulation is consumer protection. A few decades ago, before ubiquitous Internet access, this reasoning may have made some sense. But in today’s economy, information is in the hands of consumers due to social media’s user-generated content.
This means that regulators do not have to play as large of a role in protecting consumers. As the power dynamic continues to shift in favor of customers, the need for an expansive regulatory framework further diminishes.
Thanks to the disruption caused by Internet access, consumers have more power than ever before. In the past, customers controlled the buying decision, but products or services and information about them were controlled, or at least heavily influenced, by businesses.
Debates about income inequality, “the top 1 percent,” and poverty typically examine those issues within the context of a single country. But, consider a global perspective. This web tool lets you find out which income percentile you belong to relative to all the other people in the world. If you make more than $32,400 per year, you are in the top 1 percent of the richest people in the world!
Source: Blog | HumanProgress.org
I never would have guessed this.
“The disturbing evidence about the health of white middle-aged American working class, discovered and publicized by Nobel prize winner Angus Deaton and his wife Anne Case, is not tied to just one trend in the culture, policies, or economic factors at work within the United States. It is not the fault of one party or movement, but has multiple root causes. But it is something we all ought to be concerned about, both for the future fiscal and policy burden it represents, and for the broader lesson it tells us about how America is changing.”
We all seem to bemoan the decline in manufacturing like it is something new occurring the last few years. I don’t hear people advocating that we have lost too many farming jobs and we need to fix that. The truth is we live in a service economy and we have for some time now.
The chart below gives the long view of this going back to 1840.
“New ideas for reviving American manufacturing seem to appear every day. Many of these notions have merit, but most are built on a flawed premise: that the decline in U.S. factory jobs is a recent occurrence, one that can be reversed through tax cuts or trade policy. Unfortunately, U.S. industrial decline is a long-run phenomenon and will not be reversed by short-term fixes. Let’s take a look at the trends and their implications.”
Is free trade really a bad idea that we should avoid like the plague? Practically, we know it isn’t true but we have politicians advocating how they are going to put an end to it.
What would my life be like without free trade? How many $1,500 sandwiches can I afford?
“What would life be like without exchange or trade? Recently, a man decided to make a sandwich from scratch. He grew the vegetables, gathered salt from seawater, milked a cow, turned the milk into cheese, pickled a cucumber in a jar, ground his own flour from wheat to make the bread, collected his own honey, and personally killed a chicken for its meat. This month, he published the results of his endeavor in an enlightening video: making a sandwich entirely by himself cost him 6 months of his life and set him back $1,500.”
Source: Blog | HumanProgress.org
This is a moral question in our culture. Why is Social Security important and how do we fund it? Social Security Reform: A Conservative Plan – Andrew G. Biggs, NR – “Social Security’s financial health has deteriorated significantly over the past eight years, with multi-trillion-dollar funding shortfalls posing a threat to retirees and taxpayers alike. But if Social Security is to thrive in the 21st century, the next president needs to do more than simply adjust its tax and benefit rules. Instead, Social Security needs a new paradigm for how individuals and government programs contribute to retirement security.”
Regulations That Increase Housing Costs – Emily Washington, RCPolicy
The Colorado Springs Open-Carry Killing – Mike Littwin, Colo. Independent
ACA: Should You Pay the Premium or the Tax? – Political Calculations
Why Obamacare Won’t Be Preserved – Jonathan S. Tobin, Commentary
Insidious Way to Undercount Minorities – Bass & Schless-Meier, Prospect
NYPD’s Surveillance of Muslim Communities – Dennis Saffran, CJ
Like Suburbs? You’ll Love Driverless Cars – Noah Smith, Bloomberg
Opioid Crisis: Use Civil Commitment – Sally Satel, Boston Globe
Does Binding Arbitration Stack the Deck? – Silver-Greenberg & Gebeloff | Carter
Ban the Box for Federal Jobs: Pros and Cons – Andrew Kloster, Daily Signal
A Billionaire Sued Us for Defamation – Bauerlein & Jeffery, Mother Jones
Sometimes we have deep held believes that aren’t true. If you make more money, that doesn’t mean you are taking it from me and I make less. We both can make more.
Wisdom and good public policy works hard at growing the pie. Wise politicians know this.
“The rich are getting richer and the poor are getting poorer.” Senator Bernie Sanders first said those words in 1974 and has been repeating them ever since. Senator Sanders is not alone in his belief. Three out of four Americans agree with the statement, “Today it’s really true that the rich just get richer while the poor get poorer.” Senator Sanders is half right: the rich are getting richer. However, his assertion that the poor are becoming poorer is incorrect. The poor are becoming richer as well.
Source: Blog | HumanProgress.org
Here are some facts and thoughts on the minimum wage.
While manufacturing employs fewer Americans than it did in Donald Trump’s youth, total U.S. employment has risen, as more Americans find work in other sectors of the economy. If Trump would give up gains in efficiency solely to boost employment in manufacturing, then he may want to consider this famous piece of advice attributed to Milton Friedman:
Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.
Does the Donald want America to build things, or does he want us digging with spoons?
Of course, facts can be pesky creatures. Here is what real manufacturing output looks like from 1965 to 2015.
U.S. manufacturing industry added jobs in the years immediately after the North American Free Trade Agreement was passed. Trade restrictions sometimes even inflict harm on domestic manufacturing. Tariffs on manufacturing inputs (e.g., hot-rolled steel) may protect U.S. workers making that specific product, but harm all the U.S. manufacturers who need those inputs to create other products (e.g., airplane parts) further down the production line. On the whole, trade enriches us.
Our economic world has changed. It is not something that China or Mexico has “stolen” from us. Is assembling a car more honorable or useful than being a teacher, a lawyer, an entrepreneur, or an engineer; working in finance; or making a living in the service industry?
“When we have presidents who blame ATM machines and other efficiencies for unemployment and a Republican frontrunner who argues the country must be hermetically sealed from competition, that tells us, as always, there’s a deep-seated suspicion of innovation. Many experts argue that Americans living in 2015 face a unique set circumstances that prohibit them from recovering from the ravages of creative destruction. Experts claim that one in three jobs will be taken by software or robots by 2025 and that by 2030 as much as 90 percent of jobs will be at risk of replacement.”
Facts can be pesky creatures but consider this.
“Robots are better than humans at assembling things. In 1975, nearly 30 percent of Americans worked in the manufacturing sector. By 2010, it was only around nine percent. During that time, the GDP tripled and productivity soared, in part, due to automation. Robots don’t get hurt. They don’t have pensions. They rarely make any mistakes. They don’t take vacations. They don’t join unions. Their cost continues to drop. And robots are definitely not going to uninvent themselves.”
We need to focus on the future and innovation. The past is behind us and no amount of angry rhetoric will bring it back.
“Watching someone a billion people look to for moral guidance—and who’s been known to broker political agreements between world leaders—assume a critical posture toward capitalism is troubling to me as a believer in free markets. But it’s not just that I fear the pope is weakening public support for the economic freedom that increases standards of living while minimizing poverty. It’s also that when Pope Francis slanders the “magical” thinking of people who trust markets more than government, he’s reinforcing the already widespread idea that libertarianism and religion aren’t compatible.
“As a churchgoing, Christ-loving Catholic, I feel duty-bound to push back against that notion. It’s not the case that Rome demands fidelity on matters of economic policy—or that everything a pope teaches must be accepted by the faithful as correct. Actually, the ability to make unerring declarations is narrowly circumscribed according to Church teachings. To quote directly from the Second Vatican Council’s Lumen Gentium (emphasis mine), “The Roman Pontiff, head of the college of bishops, enjoys this infallibility in virtue of his office, when, as supreme pastor and teacher of all the faithful…he proclaims by a definitive act a doctrine pertaining to faith or morals.”
This is actually astounding. I never would have guessed we prop up prices this way. Just goes to show how effective lobbying can be.
“Due to trade protectionism for relatively inefficient domestic sugar producers, American consumers and domestic sugar-using industries have been forced to pay twice the world price of sugar for many generations. The chart shows that the average wholesale price of domestically-produced sugar in the US (29.23 cents per pound) is more than twice the average world price of sugar (14.87 cents per pound) since 1982, according to USDA data available here. For the latest month available (August), the US sugar price of 33.13 cents per pound was more than double the world price of 15.57 cents.
“Most of the time, the cost to consumers of trade protectionism (aka crony capitalism) is hidden and difficult to calculate. But with sugar protection, we get a monthly estimate of exactly how much money per pound domestic sugar producers are being allowed to legally pick from the pockets of millions of American consumers and thousands of sugar using-companies. Annually, the federal sugar program that subsidizes and protects Big Sugar from competition through import restrictions, price supports and loan guarantees, artificially raises US sugar prices to twice the world price and costs American consumers somewhere between $1.9 billion (according to a GAO estimate in 2000) and $3 billion (my more recent estimate for 2012 here).”
God bless William Ruggles, from Dallas. The “right to work” is a great principle of liberty and spawned a movement to codify it in our law.
On Labor Day in 1941, Dallas Morning News associate editor William Ruggles (pictured above) wrote an editorial that set an important economic movement in motion – the “right to work.” Ruggles later said in a 1956 speech that he “felt in every fiber of his being” that the right to work was the “legal heritage of the free citizen” and he therefore strongly opposed forced union membership. In his September 1, 1941 editorial, Ruggles proposed that a 22nd amendment to the US Constitution be passed to guarantee American workers the right to work with or without union membership.
Here is a key paragraph from Ruggles’ 1941 Labor Day editorial:
Now this country may wish to become a vast network of union labor. If so, it is within the rights of a democracy to so decide. But the greatest crisis that confronts the nation today is the domestic issue of the right to work as a member of a labor union, if the individual wishes, or without membership in a union if he so elects.
I admit I didn’t realize this. The Federal Reserve should be independent of the banking system. No wonder they have not raised interest rates.
Imagine that the Food and Drug Administration (FDA) was a corporation, with its shares owned by the nation’s major pharmaceutical companies. How would you feel about the regulation of medications? Whose interests would this corporation be serving? Or suppose that major oil companies appointed a small committee to periodically announce the price of a barrel of crude in the United States. How would that impact you at the gasoline pump?
Such hypotheticals would strike the majority of Americans as completely absurd, but it’s exactly how our banking system operates.
The Federal Reserve is literally owned by the nation’s commercial banks, with a rotation of the regional Reserve Bank presidents constituting 5 of the 12 voting members of the Federal Open Market Committee (FOMC), the body that sets targets for certain interest rates. The other 7 members of the FOMC are the D.C.-based Board of Governors—which includes the Fed chairperson, currently Janet Yellen—and are nominated by the President. The Fed serves its owners and patrons—the big banks and the federal government, while the rest of Americans get left behind.