Tag Archives: economics

A Price for Stability

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Global tax reform is a path to a stable international economic regime??

[T]he potential global tax overhaul would force many companies to pay more to governments, not less. But this may be a small price to pay for a stable international framework.

After all,

Existing global tax rules allow companies to transfer those profits, often to a low-tax jurisdiction.

Never mind that an even smaller price—indeed, a net positive gain in prosperity—would be lowering national taxes to the level of the lowest rates imposed by any nation. This would eliminate tax competition, reduce compliance costs as multinational companies no longer had to maneuver the way they realize their incomes and taxes owed, lead to lower end-user prices by reducing taxes as a multinational’s cost center to be covered by the price of its goods.

But no—the globalists want to raise the tax rates to a common high level. They don’t seem to care about actual global prosperity—just getting more of our money for the sake of the chimera of…stability.

I’m minded of Benjamin Franklin in a slightly different milieu:

Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.

One-Upping Elizabeth

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Who can be more socialist than the other?  Progressive-Democratic Party Presidential candidate and Senator Bernie Sanders (I, VT) now has proposed

an annual wealth tax topping out at 8% for the richest Americans, offering the farthest-reaching Democratic plan to pay for expanded government programs and break up concentrated fortunes.

That’s much more than fellow Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren’s (D, MA) now paltry 2% wealth tax.

That’s on top of the race to give the most free stuff to the most people: who’s got the more extensive Housing-for-All plan, the broader Medicare-for-All plan, the more lucrative student debt forgiveness plan, Sanders’ plan to forgive all medical debt and parent debt taken in support of students (look for Warren to come up with plans for those soon), and on and on and on.

This sort of thing can only be done through government control or outright ownership of all property, and that’s at the core of socialism.

One-upping? No, it’s who can be the more socialist.

Some Numbers

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…on President Donald Trump’s war on women.  Here they are for women-led households.  The latest Census Bureau report says

  • the share of workers in female-led households who worked full-time year-round increased by 4.2 percentage points among blacks
  • 6 percentage points among Hispanics.

Notice that.  Not 4.2 percent—4.2 percentage points.

Then there’re these numbers:

  • real median earnings for female households with no spouse present jumped 7.6% last year.
  • poverty rate among female households declined 2.7 percentage points for blacks
  • declined 4 percentage points for Hispanics
  • declined 7.1 percentage points for their children

And

  • jobless rate for black women in August fell to a historic low of 4.4%
  • jobless rate for Hispanic women was 4.2%

Trump sure is doing a lousy job in his war on women. Right up there with his poor performance as a racist.

Powell and Trump

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Nick Timiraos, writing in Friday’s Wall Street Journal, is concerned with messaging from Federal Reserve Chairman Jerome Powell to President Donald Trump—is Powell being too subtle, or does he need to answer more explicitly, Trump’s often heated admonishments?  Timiraos is concerned particularly against the backdrop of the often deprecatory nature of Trump’s opprobrium.

This is headed into a cul-de-sac, though.

The question of Fed messaging—to Trump or anyone else—shouldn’t even come up. The Fed’s role is to maintain stable pricing, full employment, and low interest rates.

Full stop.

Accordingly, the Fed Chairman and members of the BoG should stay out of politics. The Fed does its job by setting its benchmark rates at levels historically consistent with its target annual inflation rate of 2%—two of its mandated tasks. Full employment falls out of that.

Having done that much, the men of Fed governance need to sit down and be quiet, accepting that free market forces will cause all three of those goals to fluctuate—and self-correct—except in the most extreme conditions.

All of that precludes, or should preclude, the Fed members from chasing stock/bond markets—and international trade activity, which is much more about foreign policy—politics—than it is about economics.

Powell also is on the wrong path, though, when he says,

The thing we can’t address, really, is what businesses would like, which is a settled road map for international trade. We can’t do that. We don’t have that tool[.]

It’s a tool the Fed doesn’t need.  What businesses need is a stable domestic economic environment. A stable political environment, both domestic and international, would certainly be useful, too, but that’s a…political…environment and up to the political arms of government to generate. It’s outside the purview of the Fed.

It’s especially not the Fed’s job to counteract the foreign policy moves of the Executive Branch.

Government vs Charity

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Which is to say, Government welfare/wealth redistribution vs private charity.  Progressive-Democratic Party Presidential candidate and Senator (I, VT) Bernie Sanders has given the Progressive-Democrats’ game away.  The subject is private donors giving hundreds of millions of their own money to fund scholarships at colleges and universities.  Sanders tweeted that

Mr Smith’s gift was “extremely generous” but added that the “student crisis will not be solved by charity. It must be addressed by governmental action.”

Robert Smith is Vista Equity Partners CEO, and his gift was directly to Morehouse College class of 2019: he’s covering 100% of their college debt.  Other private donor gifts include

  • the Starr Foundation and Sanford Weill’s funding a $160 million scholarship program at New York City’s Weill Cornell Medicine to “eliminate education debt for all of its students with financial need”
  • $450 million from private donors to New York University for all tuition costs for all its medical students
  • $150 million scholarship fund for Columbia University endowed by former Merck CEO Roy Vagelos and his wife to mitigate medical students’ debt
  • $1.8 billion for Johns Hopkins from Michael Bloomberg for undergraduate financial aid

But Progressive-Democrats want government to do it all.  The Wall Street Journal‘s Editorial Board has the right of that:

[P]rivate generosity has an advantage in that it is more accountable than public policy.

Aside from government’s subsidies inflating costs, though, there’s much more.  Private charity is much more flexible than government’s necessarily one-size-fits-all, it’s better targeted, it goes to the recipients the donors—whether private individual or private charitable organization—choose, and it goes in the form of the donors’ choosing.

And that gives private charity much broader and much deeper reach than anything government can achieve.

But that’s also outside the control of Government, and that’s anathema to Progressive-Democrats.