Panama City, Panama. Panama has come a long way in a short time.
In the past decade, it has more than doubled its per capita gross domestic product. At the end of June 2016, it opened the new canal next to the old one that could no longer accommodate the current generation of post-Panamax ships.
Panama City has a spectacular skyline with many very tall, modern buildings — the Trump Tower being the tallest at 932 feet — with eye-catching designs and with many new ones under construction.
As can be seen in the table below, Panama has by far the highest income in Central America. The question is, why has Panama done so much better than its regional competitors? The answer is…
Countries, states and cities all compete to attract businesses — both large and small. More businesses mean more jobs and usually greater prosperity.
On Feb. 8, the Small Business and Entrepreneurship Council (SBE) released its annual ranking of the 50 states “according to 55 policy measures, including a wide array of tax, regulatory, and government spending measures.”
The findings were not surprising — Nevada, Texas, South Dakota, Wyoming and Florida were at the top, while Vermont, Minnesota, New York, New Jersey and California were at the bottom.
What is troublesome is that year after year the business-unfriendly states do so little to improve their rankings. As the author of the study, Raymond J. Keating, chief economist of the SBE Council, noted: “Too many elected officials choose to ignore the basic economic realities of how government affects entrepreneurship, business, and investment.”
Politicians endlessly cry about the “need” for more taxes and regulations in order to “protect the people.” But in most places, government is already far larger than optimum, and so more taxes and regulations only make things worse.
One basic function of money is to serve as a store of value. Because the dollar and all of the other government fiat currencies (those without backing of real assets like gold and silver) have proven to be unreliable as a store of value, the dollar as a global currency is less useful and efficient than it should be.
The United States and most of the other developed countries have also been engaged in a global war on financial privacy, which in practice, means that governments are demanding access to everyone’s accounts and transactions.
Those who value their financial privacy as a way of protecting themselves from corrupt governments, institutions and individuals (and the criminal class) have a strong incentive to use private money-like products, such as bitcoin, which may provide them with more privacy.
That is an easy prediction, because the technologies have already been developed and roll-outs of the new cars are being planned and, in some cases, are underway.
There will be many seen and unseen new technologies in the next eight years, so by the end of the Trump administration (assuming he is re-elected), the world will look very different. Unfortunately, economic advances take place more slowly, and political advances even more slowly — without much advancement in 2,000 years.
Removing counterproductive regulations and taxes and reducing wasteful government spending should lead to higher growth and, hence, more and better jobs. However, new technologies have been rapidly eliminating manufacturing jobs everywhere — even in China.
If not in manufacturing, where will all the new jobs be? The truth is no one knows, but they are likely to appear as they always have in the past.
We have heard countless assertions from journalists and politicians, ignorant of the weather history of California and the other western states, that the drought was a result of global warming.
In the January edition of Scientific American, there is a well-told story, “California Megaflood: Lessons from a Forgotten Catastrophe” by B. Lynn Ingram, a professor of earth and planetary science at the University of California, Berkley. She notes:
“Geologic evidence shows that truly massive floods, caused by rainfall alone, have occurred in California every 100 to 200 years. The only megaflood to strike the American West in recent history occurred during the winter of 1861-62. California bore the brunt of the damage.
This disaster turned enormous regions of the state into inland seas for months, and took thousands of human lives. The costs were devastating: One quarter of California’s economy was destroyed, forcing the state into bankruptcy.”
The floods, by the way, followed “two exceptionally dry decades.”
People are endlessly surprised by some unusual weather, geological, political or economic event, often with the erroneous assumption that such a thing has never happened before. This lack of historical knowledge is not confined to the poorly educated, but often experts in some field or another do not know the history of their own discipline.
The airport was shut down immediately after the shootings and remained shut for more than 12 hours, even though the shootings were carried out by a lone gunman who had been captured almost immediately.
Passengers who were on planes that had landed but not yet been unloaded were kept on the tarmac for many hours — in some cases, without adequate food, water and lavatories. Some of them were probably suffering health problems and the delay may have done them real damage. Was all of that necessary?
Predictably, some commentators immediately called for more security at airport baggage counters and for more restrictions on guns.
More thoughtful people noted that the costs and inconveniences of more “hardening” of airports and surrounding areas would be counterproductive. Each additional step to make flying (and airports) “appear” safer increases costs, time and inconvenience, causing more and more people to drive — and die — rather than fly.
A positive side effect of President Obama’s duplicity with the anti-Israeli United Nations vote was the attention it brought to what the U.N. is actually doing and how it is wasting taxpayer dollars and undermining liberty.
If the U.S. Congress had it to do all over again with the knowledge of what the U.N., the International Monetary Fund (IMF), the World Bank, and the Organization for Economic Cooperation and Development would actually do — in contrast with their promises — would it have ever agreed to their creation, let alone provide taxpayer dollars to support them?
The answer is clearly “no.” That’s despite the widespread belief that problems can be solved by setting up governmental and international organizations, staffed by experts who will make things much better — as if the mere statement of good intentions solves everything.
Let’s take a closer look at the four main globalist organizations, all of which are substantially funded by US taxpayers.
Some of the critics of President-elect Trump have insisted that the approximately two-percent annual average GDP growth the U.S. has experienced over the last seven years is the “new normal,” and we just need to get used to it.
It has led to stagnant incomes and tens of millions of involuntarily unemployed or underemployed workers. The present slow-growth path is also unsustainable, with ever-rising debt levels of a share of GDP which will eventually lead to a financial collapse.
Most people, including many economists, cannot imagine the huge gains in productivity that can arise from an increase in incentives and unseen innovations.
Fortunately, getting America back on the high-growth track only involves things that we know how to do and have done at times in the last four decades. Specifically:
One impediment to constructive tax reform is the very rules under which Congress operates.
Without getting into the complexities of the so-called budget “reconciliation” process, tax reform is limited by a requirement that tax reductions be “paid for” by other tax increases or spending cuts.
For decades, many of us have been in the battle to use “dynamic scoring” rather than “static scoring” in determining the “costs” of tax reduction.
Dynamic scoring is the attempt to look at the feedback effects of tax changes, such as the number of new jobs and, hence, taxable wages that would be created.
How many political enemies would a dictator have to kill before you would no longer want your non-adult children to meet with him?
Sean Penn wrote a particularly mindless semi-tribute to Fidel Castro in the Dec. 3 edition of the Daily Beast, where he is far harsher on Donald Trump than on Castro. The article caught my attention because he had taken his young children to Cuba to meet Castro.
I assume that Mr. Penn would not have been as enthusiastic about his children meeting Hitler, Stalin or Mao (if that had been possible), because they each were responsible for the deaths of tens of millions of people, rather than just mass-murdering thousands, as was Castro.
Many Castro tributes poured in from those who should have known better, such as Canadian Prime Minister Justin Trudeau. In addition to all of the killings and imprisonments, Castro also deprived the Cuban people freedom of speech, of assembly, of the press and of religion, the right to travel, and to fair and free elections, among other things.
His apologists say “Oh, never mind, because he improved literacy and health care.” Those who have praised Castro and Cuba merely reveal their own ignorance and lack of an ethical compass.
Hillary Clinton bought into the myth; so, while Donald Trump was holding rallies, Hillary was holding fundraisers. The Clinton campaign raised and spent twice the money as the Trump campaign — approximately $1 billion versus $500 million (including PAC money).
As a result, Mr. Trump won the electoral vote with approximately a 14 percent margin, while Mrs. Clinton won the popular vote with about a 1.5 percent margin. Clearly, Mr. Trump spent his money much more wisely than Hillary.
The Democrats failed in electing their people at all levels of government, not because of a lack of campaign funds, but because it was all too clear that their support of special interests were in conflict with the majority whose interests were in lower taxes and less regulation, not more.
The establishment media, while largely ignoring their own failures in covering the campaign, are back in full attack mode against Mr. Trump, arguing that with his extensive business holdings there are bound to be conflicts of interest, unless he sells everything.
Two basic things are ignored in these arguments.
Thirty years ago, almost anyone could walk into a bank and open a bank account with no questions asked. But now it is increasingly difficult for honest people and businesses to open bank accounts because of all the new regulations on banks, which are intended to make life more difficult for terrorists, drug dealers, child pornographers, money launderers and other assorted criminal types.
Many of those who are involved in the legal Colorado marijuana business — growers, processors and retailers — have found it impossible to get bank accounts, so they have been forced to deal in cash. As a result, armored cars go around to the various pot businesses, pick up the cash and put it in a hopefully secure warehouse.
The business is growing rapidly, so literally billions of dollars of cash are being transported and hidden in Colorado alone. Once the marijuana businesses get up and running in all the states that have made it legal, there may well be more than $100 billion in physical cash sloshing around — for this one type of business alone — making it ripe for theft, armed robbery and, of course, tax evasion.
The need to do everything in cash creates new industries, both legal and illegal.
Mr. Trump has said his focus will be on economic growth and that he will get the economy growing at “more than 4 percent per year,” and that he will balance the budget.
It is indeed true that with massive rollbacks of counterproductive regulations, the right type of tax cuts, and limiting spending (assuming a nondestructive money policy on the part of the Federal Reserve), 4 percent or more economic growth is very achievable -- and the tax, spending and regulatory reform plans that Mr. Ryan and his colleagues have set forth may well do it.
The Congressional Budget Office (CBO) projects that with no major spending program changes, real federal spending as a percentage of GDP (assuming approximately an average annual 2 percent real growth in GDP) will grow roughly 30 percent over the next 30 years, and that virtually all of this growth will come from “mandatory” entitlement programs and interest.
CBO projects real cuts in defense spending and other “discretionary” programs. It also projects the federal debt held by the public to rise from the present 75 percent of GDP to 141 percent, and interest on the debt to grow from the current 1.4 percent of GDP to 5.1 percent (or $1 trillion before inflation). These numbers are clearly unsustainable.
What should Mr. Trump do?
If you had a son or a daughter who was a member of a school debate team, and you learned that your child was receiving the questions in advance and the other debaters were not, what would you tell your child to do?
Each year there are some sport scandals, usually breaking down into two different types. One is where a player behaves badly, e.g., beating up a girlfriend or robbing a store. The other goes to the very integrity of the game, e.g., a referee receiving favors from an owner, or something like “Deflategate.”
Fans, players, owners and the league usually act rapidly to mitigate the latter type of offense, because they know, if it is allowed to persist, it undermines the integrity of the game, and, if not quickly corrected, the whole sports enterprise will lose and could even fail.
What is true for sports leagues is also true for political and governmental systems.
Countries can still survive and partially prosper even if they have bad policies on tax, trade, spending, regulations, monetary policy, abortion and gay rights.
However, they cannot prosper and ensure liberty for long if they do not uphold the rule of law and have institutions with people who insist on playing by the rules, even when they have other personal preferences.
So we come to the most important question to be answered on this election day.
What is the single most important determinate as to whether a country is rich or poor? It is not the level of government spending, taxation, regulation or monetary stability — even though those factors are very important. It is the rule of law, whereby the rules are known and fair, equally applied to all, and where corruption is not tolerated.
The end of great countries and empires was most often caused by internal decay, not by foreign enemies — ancient Greece and Rome being prime examples. History’s lesson is:
When the rule of law is lost, even great nations disintegrate.
Today, only those who are willfully ignorant fail to recognize that parts of the Internal Revenue Service and the Justice Department, as well as other government agencies, have not only become partisan but also deeply corrupt.
When evidence is destroyed after having been subpoenaed by appropriate congressional committees and private organizations under the Freedom of Information Act, and no action is taken to punish those responsible, it becomes the very definition of corruption.
There are many other examples, but what is disturbing is the extent to which so many journalists have gone to cover up and defend inexcusable behavior.
Four years from now, will you regret having voted for the person you chose this year for president? In decision theory, there is a concept called “regret,” which is the emotion experienced when realizing that an alternative course of action would have likely resulted in a more favorable outcome.
The current voter regret matrix assumes that either Hillary Clinton or Donald Trump will win, and that Gary Johnson and Jill Stein will not. It also assumes that neither Hillary nor Donald will receive 50 percent of the vote, and a majority of Americans will have voted for other candidates.
This implies that those who vote for either Mr. Johnson or Dr. Stein will realize that if most of the votes that had gone to the minority candidates had been cast for the loser between Mrs. Clinton and Mr. Trump, the other candidate would have won.
Those who vote for Mrs. Clinton are probably doing so because she is a woman, or they like her bigger government policies with promises of free stuff, or because they fear Mr. Trump more.
Hillary’s supporters are probably going to be disappointed when they eventually realize that she is deeply flawed ethically, and her bad behavior and judgment are not going to improve once she becomes president.
[Note: Please see Skye’s calculations below on how Putin’s investment in Hillary will make him $200 billion a year—JW]
Does Vladimir Putin want Hillary Clinton or Donald Trump to win the presidency?
Those supporting Hillary claim that Mr. Putin wants Mr. Trump to win, claiming that is why WikiLeaks is putting out the Hillary emails and speeches. Specifically, John Podesta, Hillary’s campaign chairman, has been very explicit in charging that Mr. Putin wants Mr. Trump to win.
The charge seems to be a bit odd, given that both the Clintons’ and the Podestas’ (John and his brother Tony’s) organizations have been recipients of large sums of money coming from Russian interests, apparently with the blessing of the Kremlin.
What is the problem? Did the Clintons and their people not stay bought, or is it all a deception? If the American people were to believe Russians are for Mr. Trump, it would hurt him.
Having been an economic adviser to senior Russian government officials during the 1992 transition from communism and subsequently involved in business with Russians, I quickly learned that the conventional wisdom was correct in that things are often not what they seem.
Or are you more shocked that Obamacare was and is a massive fraud on the American people? That Medicare, even according to the government’s own auditors, averages well over $60 billion year after year in fraudulent payments and mistakes — yet is never cleaned up?
That the levels of taxation, regulation and spending are killing economic growth, resulting in fewer jobs at lower wages? That the Department of Justice, some of the courts, parts of the FBI, and other law enforcement and regulatory agencies are increasingly being corrupted — which, if not reversed, will cause the end of the American republic?
While these real problems can kill us, the news media is consumed with Mr. Trump engaging in private locker-room talk.
Politicians who advocate for higher capital gains tax rates, higher taxes on the “wealthy,” higher inheritance tax rates, higher tariffs, more government spending and more regulations, fail to recognize, or admit, that all of this has been tried many times before, with disastrous results. They are either ignorant of economic history or are relying on the ignorance of the press and the people to buy such claptrap.
Even more disconcerting are those economists who try to make an argument of why this time the outcomes from bad policies are going to be different — apparently to curry favor with the political and media class.
The high priests of many academic disciplines, with the intent of making it seem more difficult, create many unnecessary new words, when simple, commonly understood words in the English language will suffice in most cases.
Here’s how to easily acquire basic economic literacy without the jargon, so that you’ll know more about economics than many in academia and most anyone in politics.
Government spending and borrowing are once again growing as a percentage of GDP. The federal debt held by the public was 35 percent in 2007. It is 74 percent today, and is projected to be 140 percent in 2046 — provided nothing goes wrong.
Neither Hillary Clinton nor Donald Trump have presented a comprehensive plan of what they intend to do about this problem that will sink America many decades before rising sea levels (even if the global alarmists are right, which is unlikely).
The candidates promise not to do anything serious about “entitlements” even though it is the major problem. But it probably doesn’t matter what they say until after Election Day — at which point they will be confronted by reality and have to start dealing with it.
Both Bushes, Bill Clinton, and Barack Obama all largely abandoned their tax and spending promises shortly after winning election — so why should we expect anything different this year?
Ronald Reagan was the last president who was not only serious about his campaign promises regarding taxing, spending, and regulation, but was the last one to actually do something close to what he promised, particularly the tax rate cuts — and the economy boomed.
Which brings us back to Hillary and the Donald.
More than four years ago, To The Point in Jack Wheeler’s Is Obama on Putin’s Payroll? (April 2012), explained that, “Just like the Saudis, the KGB has journalists all over the world on their payroll… Putin has tasked it with demonizing natural gas fracking with life-or-death importance.”
Since then, several independent researchers, investigative journalists and columnists – including yours truly in Putin’s Bribes to Environmentalists Exposed (February 2015) – began providing evidence and reporting on apparent funds from Russian government-controlled entities funneling into U.S. environmental groups.
The Russian intent was to help the political action activities of the environmental lobby to stop, or at least delay, oil and gas development in the United States.
There is evidence that the monies the Russians spent on the U.S. and other environmental groups did indeed slow oil and gas development, thus keeping petroleum products prices higher than they would have been otherwise.
The result — American consumers were raked over to the tune of tens of billions of dollars, thus reducing real living standards — all because a politicized Department of Justice failed to do its job.
Only those oblivious to the obvious have failed to see that the Department of Justice has become increasingly politicized. Examples abound:
Why would the Irish government argue against receiving $14.5 billion (yes that is a billion with a B) in income taxes that the European Union says Apple owes it?
The amount is greater than the entire Irish budget, yet they are saying, “No thank you.” Both the EU and the Apple executives, including CEO Tim Cook, have engaged in tax malpractice – the latter in a very different way than the former. Correcting this would be the best investment Apple could make.
Forty years ago, Ireland was the poorest country in the EU; now it has the highest per capita income in the European Union, next to Luxembourg. The Irish wisely decided that the way to improve their people’s lives was by adopting economic policies that would lead to high growth.
Meanwhile, Congress and tax officials back in the United States engaged in tax malpractice by imposing a 35 percent federal corporate income tax rate — way above the revenue maximizing rate. In addition, many states have corporate income taxes, which makes the total rate even higher.
In order to survive, many companies have moved their headquarters to other countries with lower tax rates — thus depriving the United States of the tax revenue and jobs. Many politicians accuse corporate leaders of being disloyal by moving — when what they are really doing is attempting to survive and protect themselves against destructive U.S. tax and regulatory policies.
Only muddy-brained or mean-spirited people would favor such a tax -- yet many such people are found in the Internal Revenue Service and Congress. The tax that I am referring to is the capital gains tax, and even more specifically, the capital gains tax as it is applied to the sale of commodities.
A capital gains tax liability occurs when you sell an asset for more than you paid for it. The asset could be stocks, bonds, real estate, art, or gold and other commodities.
Most commodity prices have fallen, after reaching a cyclical high at the beginning of the Great Recession, which means, even in nominal terms (not-inflation-adjusted), the capital gains tax on commodities is a net revenue loser for the government.
The issue is of renewed importance because of the rise of new, private digital-like monies (e.g., bitcoin).
Climate change projects spend enormous sums with no effect. They have not only been a waste of money, they have done real harm.
Some trillions of hard-earned taxpayer dollars have been spent to combat global warming over the last three decades. Has the expenditure of all of this money reduced global temperatures from where they would have otherwise been? No, at least not to a measurable degree.
The major governments of the world have undertaken a public policy which to date has cost far more than any benefits. The rebuttal by the advocates of all of this government spending is to say it is nothing more than a down payment on what needs to be done and the benefits will accrue to future generations.
British scientist Valentina Zharkova and her team at Northumbria University in the United Kingdom have produced a new model enabling unprecedentedly accurate predictions of the sun’s solar cycle. She recently presented her findings in an address to the Royal Astronomical Society, Heartbeat of the Sun from Principal Component Analysis and prediction of solar activity on a millenium timescale.
The model predicts that a coming periodic reduction in the sun’s magnetic radiation will soon lead to major global cooling.
Do you support free trade? Many business people, politicians and workers say they are in favor of free trade “but with conditions” — because they can see and feel the job losses but not the job and income gains.
Consumers benefit from free trade — in terms of lower prices and more products of better quality. Think of the empty shelves and higher prices in Wal-Mart stores if there were no foreign-made goods.
Critics of free trade, however, point out that State-owned or subsidized firms in some countries are able to sell into the international market place at prices below costs — for long periods of time — which competing privately owned firms believe is unfair, causing them to incur losses or even go out of business.
Many blame the loss of U.S. manufacturing jobs on free trade, but the real reason is something else. Here’s the single most effective thing the United States can do to bring jobs back to the U.S.
Did you know that at an average economic growth rate of 2 percent it takes 35 years for incomes to double, while at a 4 percent growth rate it only takes 17.7 years for incomes to double?
At the moment, the United States is only growing at a rate of about 1 percent, and if no improvement comes it will take another 69.7 years — or a little less than one lifetime for incomes to double. At a growth rate of 4 percent, incomes will increase more than fourfold in the average lifetime.
Without moderately high rates of growth, there is no chance of reducing the debt, maintaining even a modest safety net, including medical and retirement programs, and creating more jobs at higher real wages. The good news is, in the absence of destructive economic policies, capitalist economies tend to grow rapidly.
There is extensive empirical evidence (and theory) of what works and what doesn’t. Let’s review it from Reagan to Obama.
The answer is almost certainly “yes,” but that does not mean that the DNC and other emails were released on behalf of the Kremlin to help Donald Trump. The basis for my skepticism of the charge that the email dumps were ordered by Russian President Vladimir Putin is as follows.
To begin with, I am no fan of Mr. Putin and the Russian government, as I was subjected to Russian-Bulgarian disinformation campaigns; because of my high-profile work on the economic transition in Bulgaria and Russia in the early 1990s; and my expose of Russia payments to members of the Bulgarian Parliament to support the now-abandoned proposed gas pipeline from Russia to Bulgaria 2 years ago.
Consider that the Clintons have been covert financial allies of Mr. Putin for a number of years. They are allies in environmentalism’s war on fossil fuels (the more expensive oil is, the more billions he makes). Consider the New York Times front-page story of April 23, 2015: Cash Flowed to Clinton Foundation Amid Russian Uranium Deal.
So here are some questions to ponder.
All plagues, whether they are biological or destructive policy ideas, begin at some specific place and time. The city of Austin, Texas, is now the place of origin of what could be a very costly experiment. (Yes, Texas – which is a Red State overall, but the people who run Austin, like Houston, are Hyper-Blue –JW.)
Unneeded and ill-considered regulation is annoying, costly and damaging, and it fuels corruption. Those in the political class love to regulate. They love the power regulation gives them over their fellow citizens.
They love the fact that the threat to regulate causes the potentially affected to make campaign donations, or provide speaking fees or gifts to avoid having the regulation imposed.
They love the fact that promising to maintain or “enhance” a regulation causes the beneficiaries (often big business) to keep the payoff money flowing to them.
Those who have jobs in regulatory agencies have many incentives to keep the number of regulations ever-growing as a way of obtaining more job security, status and power. In sum, much of the regulatory apparatus is fundamentally corrupt and destructive. This is what’s happening in Austin.
Environmental zealots and the politically correct have become modern-day book burners in their attempts to criminalize and repress the speech of those who disagree with them. The Nazis and other dictatorial regimes used the old practice of book burnings and gun seizures as a way of maintaining control and intimidation. Burning books is most often done to censor materials that the authorities consider to be offensive to the cultural, religious or political order.
In the digital age, it becomes almost technologically impossible to destroy information, even though restrictions on its legal possession and dissemination can be imposed and people can be prosecuted.
In the modern world, those who have power, but not the ability to convince others, often resort to censorship, or attempt to legally or forcibly ban ideas, products, like guns and sugary drinks, or practices that they disapprove of.
Is today the worst of times? This past week we had shootings of police and shootings by police. The world economy and political situation is a mess. It is a time of crisis without an apparent Churchill, Thatcher or Reagan?
Yet, in many ways, things have never been better. In 1930, 304 American police officers were killed in the line of duty; last year it was 122.
In 1930, the U.S. population was a little over one third of what it is today, so, on a population adjusted basis, there were about seven times as many policemen being killed per year 85 years ago compared to recent years. And police killing of others, including black men, has also fallen sharply.
Most everything we buy becomes less expensive and better over time. A few decades ago, the doomsayers claimed that we were going to run out of many commodities, like oil. The fact is that most commodity prices, in real terms, are near record lows, and proven global oil reserves have never been higher.
Many improvements, and particularly new products and innovations, are not fully captured in the economic statistics, which means that the real improvements in well-being are underreported.
Have you ever wondered why it is that even the most successful companies invariably stall out in terms of growth and profits?
The reason is that any organization, whether it is a business, a nonprofit, or a government, reaches a point where it can no longer be managed in an effective and efficient manner as it was when it was smaller.
When I took my first course in antitrust as a graduate student, the big concern at the time was that IBM would monopolize the computer industry, that U.S. Steel would monopolize the steel industry, and that General Motors (GM) would monopolize the automobile industry.
Such concerns seem absurd today, where there is more concern about the long-run viability of these companies than fear they will engage in monopoly power and abuse.
Economists have long understood the dangers of monopolies. Monopolies tend to become slothful and less well-managed, are easily corrupted, increase costs, reduce innovation, and thus slow progress.
But what is too often ignored is that government monopolies of any activity also eventually exhibit all of the characteristics of private sector monopolies, but are even worse because there is often no effective check on them — even in democracies.
The Brexit vote is just the beginning of the revolt against unaccountable institutions and persons. The global political-economic class reacted with horror when a majority of British citizens said “enough is enough,” by voting to leave the EU.
Rather than government by citizens for the citizens, the world has increasingly become government by unaccountable bureaucrats for bureaucrats.
As a result, there is emerging a middle class revolt against the mandarins of the EU, the UN, the IMF, the World Bank, the OECD and other supranational organizations designed to supersede national laws and sovereign rights. It’s about time.
Most people who have reached a certain age have changed their minds about something or someone that they firmly believed in the past. Many of the real conflicts in society, including hate-driven mass shootings, result from people who fail to acknowledge, even to themselves, that they could be wrong.
Yet today, we see some subset of Moslems who think they can take action against the rest because they are unable to acknowledge that they could be wrong in their beliefs.
We see the effort of many in colleges to shut down the free speech of those they disagree with. We see the effort of some to shut down media whose messages they reject.
We see those for whom global warming has become a religion rather than a science. They speak with great certainty about things they cannot possibly know, because of the immense number of variables, or in the words of F.A. Hayek, they suffer a fatal conceit (as did the early Bolsheviks).
All of this comes from a failure to admit, “I may be wrong,” and without such understanding, a civil society cannot exist.
We see those for whom global warming has become a religion rather than a science. They speak with great certainty about things they cannot possibly know, because of the immense number of variables, or in the words of F.A. Hayek, they suffer a fatal conceit (as did the early Bolsheviks).
At the end of this past week (6/10), The Washington Post ran a long story on the Center for Freedom and Prosperity (CFP), an organization that I have long supported. It appeared that the original goal was to do a hit piece on CFP because it had been a leader in the fight for global tax competition and smaller government.
It seemed to stun The Washington Post’s writers that only a couple of people with a tiny budget were able to stop major governments from even doing more of a tax-and-regulatory grab — mainly because the CFP only needed to effectively expose the facts and the truth, which they did.
Dan Mitchell, chairman of the board of CFP, quoted Michigan’s former Democrat Sen. Carl Levin (1979 to 2015) as saying that the CFP’s “activities run counter to America’s values and undermine the nation’s ability to raise revenue.”
Note: During the time the senator was in office, federal tax receipts soared from $463 billion to $3.2 trillion — and he complained that was not enough, showing there is no limit to the greed on the left to spend other people’s money, no matter how much economic and social damage it causes.
The U.S. economy has been going nowhere for seven years, and there are increasing fears that it is going into a recession with only 38,000 jobs being created last month.
At the same time, Venezuela, the country with the largest oil reserves on the planet, is sinking into economic chaos. None of this need happen. The disease is the same -- only the fever is higher in Venezuela.
Politicians, at least going back to ancient Rome (with its bread and circuses), quickly understood that they could buy temporary support from the people if they were promised “free stuff.” As Margaret Thatcher famously said:
“The problem with socialism is that eventually you run out of other people’s money.”
When Moses came down from the mount, he brought with him 10 rules covering most things that people really needed to know and could remember. There are now literally millions of federal rules that we are all supposed to have knowledge of and comply with — clearly an impossible task for any mere mortal.
The result is we have lost our individual liberty because, if the feds decide to target you, they can always find some rules you have broken. The IRS is Exhibit A, with more than 70,000 pages of rules that no one can possibly know.
Several studies from highly reputable institutions have been released in the last number of days, all with similar alarming conclusions — namely, millions of new jobs have not been created, and wages for existing jobs have stagnated because of the ever-increasing costs of new regulations. What can we do about it?
Well, what do you do when you see a mosquito on your arm biting you?
The end is near — depending on how you define “near” and where you live.
A couple of weeks ago, hedge fund legend Stanley Druckenmiller gave an important talk arguing that the crisis is about to hit and investors should liquidate their equity holdings. He and others who have similar views have been the subject of much debate among economists — more of it about the timing of the next global and U.S. downturn and not so much about whether it will come.
The crisis has already hit many — depending on where you live and what assets you hold — and will eventually spread to billions of others, including a very large segment of the U.S. population.
The fundamental problem is most countries are experiencing little or no growth as a result of excessive government spending (particularly on transfer payments), and destructive regulations and tax policies.
The unwillingness of the politicians (and their voters) to cut back on spending and regulation has led to an explosion of government debt, which is not sustainable at current levels of economic growth. This, in turn, is fueling a demand for more government spending (more free stuff) and thus more debt.
How long do you think this can go on?
Well brought-up individuals are taught not to take things from other people’s pockets: “Thou shall not steal.” There are those who never learned the lesson — criminals, and many in the global political class.
The latest targets of the global looters are multinational corporations. During the last few years, there has been an effort by high-tax countries (many of which are rich) to establish global minimum corporate taxes and for international tax bureaucrats to determine how taxes on a company should be allocated among the jurisdictions in which it operates.
Even though the effort is cloaked as an issue of "tax fairness," it is really an effort of more powerful countries and their political classes to take away more from those who earned it and spend it on themselves and their friends.
This effort to tax companies more raises a series of questions.
First, is it wrong for corporate officers to try legally to minimize their company's tax bills? No, in fact, corporate officers have a fiduciary responsibility to their stockholders, employees and even their customers to minimize costs, including taxes.
Second, should corporations be taxed at all? Again, the answer is No. Here’s why.
This past month, I received an email from a European friend (who has a doctorate in chemistry) saying: “Dear Richard: Now you are a member of this illustrious club! I am beginning to be afraid! What is going on?” It seems my name had been put on a “Global Warming Disinformation Database.”
New York Attorney General Eric Schneiderman has invited more than a dozen state attorneys general to join him in investigating fossil fuel companies and their donations, because they raised questions about some of the “science” used by the global warming lobby. Al Gore joined him at the press conference.
What is going on is nothing more than modern-day Lysenkoism, named after Soviet biologist Trofim Lysenko, who had rejected Mendelian inheritance and the evolutionary theory of natural selection.
Lysenkoism is now used in a metaphorical way “to describe the manipulation or distortion of the scientific process as a way to reach a predetermined conclusion as dictated by an ideological bias, often related to social or political objectives.” This is precisely the case with Climate Alarmism.
Would you like for the bank to give you a check each month for your mortgage interest payment rather than you paying the bank interest?
As mad as that question seems, the fact is that some homeowners in Denmark are now receiving checks each month because their mortgages have negative (below zero) interest rates. A negative interest rate is the situation in which the lenders pay you to borrow money from them.
A number of central banks now have negative interest rates, including Japan, the European Central Bank, Sweden, Denmark, Switzerland and others — all done in the hope of increasing inflation (which is more madness). The chairman of the U.S. Federal Reserve has said she is not ruling out negative interest rates.
Negative, zero or very low interest rates encourage people to buy much more expensive homes than they normally would, which is to their benefit until interest rates rise. Despite stagnant economies many European cities are experiencing a rapid rise in home prices largely because of low interest rate policies. This real estate bubble cannot be sustained, so at some point it is going to all come crashing down.