“How Barack Obama rescued the US economy”

That’s the headline on a recent Financial Times piece (sorry, the FT has a paywall) by Martin Wolf.  It’s a silly headline, for a silly article.

How should we assess the economic success or failure of Barack Obama’s presidency?

This is a difficult question to answer.

Polemics vs Reasoned Argument

As the Congress considers import taxes as part of its general tax reform agenda, toy sellers are expressing their concern: they import most of what they sell; their products are manufactured overseas.  Import taxes are surely a thing worth discussing and debating thoroughly, whether they’re essentially cost of goods sold neutral, as Doug Holtz-Eakin argues (the dollar will rise from the tax change and economic growth, and so the dollar cost of imports will fall; the cost of goods sold will simply emphasize taxes more and import costs less), or they’re dangerously like protectionist tariffs, as others argue.

Growing Irrelevance of the World Economic Forum

The rising income gap and growing rifts in Western societies that led to the election of Donald Trump and the Brexit vote are the main global risks, according to a report by the World Economic Forum ahead of its annual forum in Davos next week.

Climate change and technological disruption were also listed as important risks in a survey of 750 law makers, business leaders and academics carried out by the WEF….

Oil-and-Gas Industry and Tax Breaks

Here’s another post comes from a Wall Street Journal debate/point-counterpoint piece.  This time, though, I think the question itself is too narrow, limited as it is to oil and gas subsidies.  The imbalance in the WSJ question is illustrated by this claim from President-On-The-Way-Out Barack Obama (D):

Not only has President Barack Obama repeatedly called for a repeal of much of the oil-and-gas industry’s favorable tax treatment, his budget proposal for fiscal 2017 included a new $10-a-barrel fee on oil to help fund low-carbon infrastructure projects.

Government-Mandated Fuel Standards

This post comes from one of The Wall Street Journal‘s earlier debate/point-counterpoint pieces.

Carol Lee Rawn, who runs the Transportation Program at Ceres, made her argument in favor of this Government intervention into the free market (many of you can guess my position on fuel standards set by Government rather than by market).

First, the standards benefit consumers and the economy. The standards set different mileage goals for different sizes of cars and trucks.

Tax Rates

James Pethokoukis had a piece on this at AEIdeas, but I want to focus on just a small part of it.

[W]hat would be the economic case for lower rates for the 0.1%?

Pethoukis doesn’t object to these lower rates; he just has other job-growth priorities.

I have, though, two questions in answer to this question: what would be the economic case for excluding this or that group of Americans from an otherwise general tax policy?  And the obverse: what would be the economic case for forcing inclusion of this or that group of Americans into an otherwise limited tax policy?

Fair Share

Here, via AEIdeas, are some more data on the relative shares of income taxes members of various economic strata pay. 

The 1,400 citizens in the top one-thousandths of one per cent of income tax payers paid 30% more in taxes across the class than did the 70 million citizens in the bottom 50%.  Singling out the top 400 for special consideration, they paid 78% of the total that those in the lower half paid in aggregate.

It works out, too, to $35.6 million per Privileged One compared to $540 per Poor Downtrodden one.

A Market Prediction

Because hubris—I has it.

In an article on the future relationship of Central Banks with economies and markets, The Wall Street Journal had this datum tossed in:

…shares in the S&P 500 are currently trading at 17 times the earnings they are expected to generate during the next year, compared with a 10-year average of 14.4[.]

That’s not a very large premium; all this P/E ratio means is that, in the coming year, stock market growth will be slower than in the last couple of years (recall that I’ve written, too, about the disconnect between the stock market and the underlying economy in the last few years).  Prices will slow their rise as earnings catch up; prices won’t fall back toward earnings.

The Regulation Administration

…is in its last days, but it keeps on trying to keep in our business.  In an article for an upcoming issue of New York University Journal of Legislation & Public Policy, Secretary of the Treasury Jack Lew

made a closing argument Wednesday in defense of the financial regulatory overhaul the Obama administration engineered during the past eight years.

Among his arguments:

Mr Lew makes the case that those new entities [e.g., the Consumer Financial Protection Bureau and the Financial Stability Oversight Council] allow the government to react to new forms of consumer abuse or financial engineering.

Economic Advisors

President-Elect Donald Trump has them.

  • Larry Kudlow, the anti-Keynes, to run (maybe) the White House Council of Economic Advisers
  • Peter Navarro to Head the White House National Trade Council
  • Steve Mnuchin for Treasury Secretary
  • Wilbur Ross for Commerce Secretary
  • Linda McMahon for Administrator of the Small Business Administration
  • Gary Cohn to run the White House National Economic Council
  • Mick Mulvaney to head Office of Management and Budget
  • Rick Perry as Energy Secretary
  • Andrew Puzder for Labor secretary
  • Scott Pruitt for Administrator of the Environmental Protection Agency
  • Elaine Chao for Transportation Secretary