Climate Realism

Following is a nice summation from a warming skeptic...

Climate Realism

 

Zero Tax Rate

Given the demagoguery from the left on the low effective tax rates paid by Romney, the following article is worth reading. Dan Mitchell argues that the tax rate on capital gains should be zero. I agree, but explaining the concept to those for whom class warfare is more important than good tax policy and economic growth will be a tough sell.

The Wall Street Journal's Primer on Capital Gains Taxation

We're No. 18!

 Those of us who believe that economic freedom is the key to prosperity will be dismayed, though probably not surprised, by the following:

U.S. Plummets to 18th in New Economic Freedom of the World Rankings

Trade

Regarding trade, Obama (and most other politicians) has it exactly backward.

Classic 1978 Milton Friedman Lecture on Trade

QE3

The Federal Reserve Bank announced a few days ago that it would begin implementing another round of pumping money into the economy, i.e. buying $40 billion of mortgage bonds per month till further notice. This is called Quantitative Easing, or QE. This particular round is called QE3, because the Fed has already tried QE1 and QE2. It's sort of like a doctor putting the paddles on a patient's chest and yelling "Clear!"

The implementation of QE3 suggests that QE1 and QE2 did not have the desired effect of pulling the economy out of the shitter. Isn't this an example of Einstein's dictum regarding insanity, i.e. repeating the same behavior and expecting a different result? Or is it simply an attempt by Fed Chairman Ben Bernanke to keep the economy on life support long enough to get Obama reelected?

Memo to Politicians: Stop Trying to Fix It

One of the reasons the economy is down the shitter is that government doesn't know when to leave things alone, and therefore repeats the same old mistakes. The usual cycle is as follows: 

 

1) Free (or relatively free) markets make a mistake, which happens from time to time.

 

2) Rather than let relatively free markets correct those mistakes and punish those who make them, which markets are uniquely qualified to do, politicians decide they must do something, presumably to justify their existence.

 

3) Politicians enact regulations which they claim will fix the problem that markets would have fixed anyway.

 

4) Politicians pat themselves on the back and tell voters they're looking out for the little guy.

 

5) Since regulatory bureaucrats are not smart enough to anticipate all the issues that may arise in a complex economy, and since regulations distort market signals, and since the regulated entities are usually pretty good at figuring out ways around the regulations, more problems arise.

 

6) Politicians then have to fix the problems that they essentially caused by not letting markets work in the first place.

 

7) Go back to step 1 and repeat.

 

 

The following is worth a read. Here's one nugget I especially like: "...capitalism without bankruptcy is like religion without hell."

 

Dodd-Frank: Pimps for Fannie and Freddie 

Doing Nothing

What if we had a recession and no one did anything?

Thomas Sowell: An Economic 'Plan'?

How Soon We Forget

What do you get when you combine 1) a willing accomplice to revisionist history in the form of the mainstream media, and 2) the incredibly short memory and ignorance of the American public? Answer: the surreal specter of Bill Clinton posing as an economic policy genius. And getting away with it. The fact is that Clinton was a major architect of the 2008 economic collapse.

Housing arsonist Clinton now portrayed as heroic firefighter.

More on GM

More on the democrats' claims about Obama saving GM...

Although not mentioned in the article below, a new report is out which concludes that GM is losing as much as $49,000 for every Chevy Volt it sells. Only a government-run business could think that such a business model is sustainable.

The Democrats' GM Fiction

Saving Detroit

We have heard a lot from democrats, especially during their convention, about how Obama saved the auto industry from bankruptcy, which the evil Romney would have allowed to happen. This story has become perhaps the central theme in the narrative about Obama's successful stewardship of the economy. But as the article below points out, Americans have a remarkably short memory. Chrysler and GM did in fact go through managed bankruptcies, as Romney suggested they should. The difference is that Obama wasted a lot of taxpayer money before it happened, and screwed secured bondholders in the process so he could help out the unions.

I pass this along in case one of your liberal friends tells you that Obama is the auto industry savior he claims to be.

Obama DID let Detroit go bankrupt.