Tag Archives: economics

What He Said

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Mississippi’s Republican governor, Tate Reeves, had a few words to say in response to Vermont’s nominally Independent Senator, Bernie Sanders, the latter whom wants a moratorium on building data centers to support AI development or any other uses. Reeves’ words, though, have much broader implication, and I’ve repeated them below in their entirety.

I understand individuals who would rather not have any industrial project in their backyard. We all choose where to live, whether it’s urban, suburban, agrarian, or industrial. I do not understand the impulse to prevent our country from advancing technologically—except as civilizational suicide.
This instinct seems to infect the far left across lots of domains: immigration, crime fighting, and the national debt to name a few. You can tell they’re just sort of yearning to submit our society to outside forces: mobs, international councils, or communist China. Maybe they’re exhausted and just want a few years of taxpayer-funded rest before they shuffle off.
I don’t want to go gently. I love this country, and want her to rise. That’s why Mississippi has become the home of the world’s most impressive supercomputers. We are committed to America and American power. We know that being the hub of the world’s most awesome technology will inevitably bring prosperity and authority to our state. There is nobody better than Mississippians to wield it.
I am tempted to sit back and let other states fritter away the generational chance to build. To laugh at their short-sightedness. But the best path for all of us would be to see America dominate, because our foes are not like us. They don’t believe in order, except brutal order under their heels. They don’t believe in prosperity, except for that gained through fraud and plunder. They don’t think or act in a way I can respect as an American.
So, let’s see Americans (and Mississippians) dominate this space—no matter how many leftists want us to roll over and die instead.

That last is especially important; I’ll say it again:

So, let’s see Americans (and Mississippians) dominate this space—no matter how many leftists want us to roll over and die instead.

An Overblown Concern

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Citrini Research wrote a report that’s associated with Monday’s stock market spike down. Its report centered on the risk of heavy white collar job losses from AI’s alleged ability to do white collar work and completely replace those white collars.

For the entirety of modern economic history, human intelligence has been the scarce input. We are now experiencing the unwind of that premium.

And so on.

Not so much, though. It took more mental acumen to run the steam drill than John Henry needed to run his hammer. It takes more mental acumen to work a modern auto production line, with all of that automated equipment, than it did—and does—to work an artisan, unautomated auto production line. The move extends into the white collar milieu, also. It begins with requiring more mental acumen to check AI’s work than it does to work the spreadsheets or do the research oneself. It takes a great deal of mental acumen to ask the right questions and then give AI the tasks of answering them—and then checking AI’s responses. Creativity is something AI cannot do.

AI is good at the artificial part; it’ll be quite some time before AI gets good at the intelligence part. Alan Turing once said that when a computer can answer certain kinds of questions, they’ll be impossible to distinguish from humans. That doesn’t prove computers’—AI’s—superiority, though. Answering questions isn’t the same as asking them.

Who Owns our Economy?

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Greg Ip, a writer for The Wall Street Journal, says those of us older than 65 do.

As of the third quarter of last year, people 70 and over controlled roughly 39% of all equities and mutual funds owned by households, compared with 22% in 2007, according to Federal Reserve data. Their share of net worth—assets minus debts—was 32%, up from 20% two decades earlier.

And

Wealth accumulates with age, so people at retirement tend to have much more than younger generations, a pattern evident in Fed surveys back to 1989.

And so on.

Even were that true, it’s only a temporary ownership. What Ip missed is this truism: we can’t take the economy, or our wealth, with us when we relocate to Dirt Nap Acres. We leave that wealth to those younger generations, our children, and to a variety of charities and endowments, all of which benefit those younger generations.

All that means that tomorrow, those younger generations will own our economy, starting well before they become the next geezer owners of the economy.

It’s a generational cycle, and that background is the framework within which the economy’s business and political cycles play out.

The Left’s Mantra

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And I offer an equally oft-repeated alternative.

The Left wants to ever more heavily tax the rich, and their Progressive-Democratic Party politicians can’t conceive of any taxing or spending alternative. Conservatives want to lower taxes and cut government spending. A current example of the former is playing out in California.

Federal cuts to the state’s Medicaid program will leave its health system short of billions of dollars. A California healthcare union wants an emergency, one-time 5% levy on the wealth of any resident worth over $1 billion to plug the hole.

Those Federal cuts are a small and rare spending cut victory. Raising taxes on the rich (for those who truly think that 5% tax is a one-off, I might have some beachfront property north of Santa Fe that might interest you) is the only answer Progressive-Democrats and rent-seeking union managers can think of.

The Wall Street Journal‘s news writer is cut from the same cloth. She opened her piece with this:

The risk is that the US economy becomes increasingly dependent on a narrow group of very rich households, whose spending is tied to the performance of the stock market. This could mean the entire economy pays a steep price in the next market correction.

It’s inconceivable to the denizens of the Left that alternatives exist. There are two—closely intertwined—that come readily to mind. In no particular order, they are cutting tax rates and cutting government spending.

Don’t just willy-nilly do allegedly targeted tax cuts, instead, lower the tax rates on the bottom 80% of us tax payers to the level paid by the top 20%. An easy, but all too difficult politically, way to do this is simply to reform our tax code to charge a single low flat rate on all income regardless of source—a rate in the range of 10%-15% on the sum of an individual’s income from all sources. Of course, that would include the market value of stock options on the date of an award’s vesting and other such moves to transfer income from W-2 forms into other venues. That guarantees all of us are paying the same rates and it eliminates the news writer’s plaint: that claimed dependency of the government on tax revenue from the rich.

The other component of the intertwining is to reduce government spending. Exercise true fiscal discipline, and spend taxpayers’ money only on those things truly, critically needed; stop spending on the nice-to-have goodies.

A wealth gap will still exist, but that’s neither good nor bad in itself. The gap—especially under the more equitable tax regime—is, and would be, the result of differences in luck, work ethic, and innate talent. The increased economic mobility that would obtain also would have folks on the lower rungs moving up the economic ladder as their fortune, ethic, and talent have it, and folks on the upper rungs moving down as their fortune, ethic, and talent have it.

Trumpian Tariffs, Who Pays Them, And So What?

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The Federal Reserve now is saying that us Americans are paying 90% of the tariffs put in place by President Donald Trump (R).

In an analysis on the [Federal Reserve] bank’s website, four researchers write that last year “nearly 90 percent of the tariffs’ economic burden fell on US firms and consumers.”
They reach that conclusion by examining import data, to see whether foreign suppliers cut their prices in response to Mr Trump’s added tariff costs. Over the first eight months of 2025, “94 percent of the tariff incidence was borne by the US,” the analysis says, meaning “a 10 percent tariff caused only a 0.6 percentage point decline in foreign export prices.”

Say that’s accurate—and, frankly, I have no reason to dispute it—it seems that the tariffs’ impact on the prices us American consumers face has been effected already, that impact is minimal inflation, and that inflation seems to be coming under control. That’s the case even as individual items—furniture, for instance—do seem to have ongoing price increases that are more closely related to tariff rates.

Overall, that leaves other causes also impacting inflation at least as much, if not more, than tariffs: supply chains dependent on distant foreign nations with the attendant shipping costs, those shipping costs themselves dependent on container rates and fuel costs, and especially our dependency on critical items like rare earth ores and refined rare earths that are controlled by an enemy nation that already is squeezing our economy with greatly reduced and heavily controlled exports to us. Even those rising furniture prices are, in addition to tariffs, strongly impacted by Canadian charges for exporting timber to the US—which costs impact house construction costs as well as costs for the furniture to put into them.