Tag Archives: economics

Economics, Politics

Free trade only works where there is trust

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All other things being equal, free trade is ultimately phenomenal for countries and individuals.  Using money as a medium of exchange, I trade my finance/accounting/leadership skills and experience with people who are good at making groceries, building cars, giving dance lessons, etc.  Win-win.

But the key part is about things being equal.  When one party – let’s say, China – has the system rigged in their favor by world trade organizations, is manifestly corrupt and evil, steals from you, spies on you, lies to you about pandemics, abuses their citizens, has no free speech, etc., then things are obviously not equal.  It would be foolish to continue to buy, say, 95% of your antibiotics from them.  Keep in mind that they are so evil that NBA players, coaches and leaders will criticize Trump 24×7 but punish anyone daring to offer the mildest criticism to China.

So this was good to read: Coronavirus pressures US manufacturers to bring plants home from China:

The COVID-19 pandemic has America rethinking its reliance on China for not only key medical supplies but production capacity in general after Beijing clamped down on exports of critical items used to combat the disease. . . .

“One of the things that has happened with this pandemic is it’s revealed to everybody the limits to our digital superiority and our software and all the things that we’ve innovated in technology,” Sen. Marco Rubio, R-Fla., told FOX Business’ Maria Bartiromo. “You still have to be able to make things. You still have to have industry and industrial capacity as a country. And we’ve given a lot of it away.”

Indeed, only about 11 percent of U.S. gross domestic product comes from manufacturing today, down from almost 40 percent in 1945. . . .

Although cheaper Chinese labor remains a factor in companies’ decisions to make their products in that country, it’s not the advantage it once was, Freeman said. Instead, China lures companies with tax breaks and other incentives, as well as the appeal of its domestic market.

That’s one of the many reasons that Trump’s tax cuts were so important.  When countries have lower taxes that often swings  financial decisions.  Back in the 90’s Compaq sent tons of business to Singapore because their tax rate was zero while the U.S. rate was 35%.  That meant that even if you got free labor, buildings, machines, etc. it would still be more profitable to build in Singapore than the U.S.  Our corporate tax rate doesn’t need to be zero, but keeping it lower will remain important if we want jobs back.

President Trump has repeatedly called on U.S. companies to bring their operations back home, moves that would likely provide a spark to a labor force that has over the past four weeks seen 22 million workers lose their jobs, at least temporarily.

That’s one more reason the Left will fight the obvious.  Although temporarily the Democrats realized they need to have their Joe Biden Talking Doll (TM) pretend to be harder on China than Trump has been.  Of all their lies, that is a grand one.  Anyone paying attention knows how hard he has been on them long before Covid-19 and how Biden has been in bed them for a long time.

He believes the COVID-19 experience will cause many companies to “rethink the safety and security of reliance on global markets,” and that there will inevitably be some movement of capital-intensive — not labor intensive — production back to the U.S. . . .

The U.S. Chamber of Commerce “supports a robust commercial relationship with China,” he added, but also understands the “need for some rethinking of that relationship.

I quit trusting the Chamber of Commerce years ago.  Those “Republicans” are the ones who brought us ridiculous levels of illegal immigration.  The Dems get the votes and these country club Republicans got cheap labor.

Rubio agrees. He told Bartiromo that the current level of U.S. dependence on China’s industrial capacity has put our country “in a very dangerous situation.”

“I hope that one of the things that will come about now is a broad consensus in this country that we have to be able to make things in the United States,” he said.

The same goes for oil and gas.  Fracking and such has been one of the greatest wins in our history, as it has provided jobs and reduced dependence on foreign oil.  Guess which side fights that 24×7?

I’d gladly pay more for clothes and such knowing that it created jobs in the U.S.  I hope we do bring a lot back from China.

Economics

Fact: Illegal aliens steal jobs and suppress the wages of remaining jobs

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And they destroy the communities they are poured into — which, of course, aren’t the communities of the elitist virtue-signaling whites who push for open borders.

The title is such a Captain Obvious kind of economic statement, founded on the simple and timeless impact of the law of supply and demand, that it should go without saying.  But because Leftists literally fail at basic economic concepts and throw low economic status minorities under the bus to pander to illegal aliens,  it needs to be repeated over and over.

The Left pretends that the only jobs that illegal aliens take are those of picking crops and such (as if that would justify them breaking the law).  But here’s a recent example that I heard about in detail from an accounting executive of a company in the U.S. (I’m not being overly specific here because of confidentiality issues).

  • A couple hundred illegal aliens who performed semi-skilled labor walked off the job at a U.S.  manufacturing company because they heard that Immigration and Customs Enforcement (ICE) was going to do a raid.  (It wasn’t clear whether the company knew they were illegal aliens or not.)
  • The company was understandably desperate to fulfill their customer orders, so they went to the market to replace the employees.  When they did so they realized that they had to pay fifty percent more in wages.  Fifty percent!
  • The remaining employees who were citizens got a huge raise.
  • The new employees got market wages.
  • These jobs were ideal for those without college educations or formal training.  They require some skill, but it can be learned on the job.

Simple and valuable lessons:

  • Illegal aliens took jobs of U.S. citizens, because they were willing to work for so much less.
  • Illegal aliens significantly suppressed the wages of the remaining jobs, because they were willing to work for so much less.
  • Law enforcement works!  What a concept, eh?  We still need a wall and/or much better border control, like any sane country would have.  But in the mean time merely enforcing some of our existing laws has a huge benefit for our citizens.  If companies know they’ll get caught and fined they won’t hire illegal alien labor to begin with.  And the honest companies won’t be at a competitive disadvantage for doing the right thing.
  • Getting citizens off unemployment / welfare reduces the burden on society and has more people paying into the system.
  • The Left — including the “Christian” Left — pretends to care about low income blacks while acting against their best interests 24×7.  They pander to illegals to get votes so they can stay in power and reap the benefits of crony capitalism, but that means the low income minorities stay on the Democrats’ plantation.
  • Obama & Co. pretended to care about blacks, but what did they have to show for it after 8 years besides higher unemployment, destroyed towns like Ferguson and the worst race relations in half a century?  The Left has to constantly play the race card on Trump because he is actually helping blacks get jobs.
  • This doesn’t even include the huge tax burden of millions of illegal aliens consuming educational, welfare and other resources.
  • It doesn’t include how many jobs are now unattainable for blacks because they require bi-lingual skills.
  • When the “Christian” Left tries to claim that Jesus was an illegal alien, remind them that their claim is historically false, we don’t live in an Israelite theocracy, and people who repeat that nonsense to promote open borders just for the U.S. are some combination of ignorance, malice and treason.

The working poor – which have a disproportionate amount of minorities – are already benefiting by the reduction of illegal aliens entering the country.

And, ironically, they have President Trump to thank for it.

Economics, Favorites, Politics

Who is better at economics, Leftists or my dogs?

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And which group, Leftists or conservatives, truly has the best interests of the poor at heart?

Given that the tax bill is about to (hopefully) pass and the Left is in full pants-wetting mode over it, one might ask a couple questions about Leftists, and especially “Christian” Leftists:

  1. Are they qualified to opine on economic matters?
  2. Even if they were qualified to understand basic economic concepts, do they really want conservatives — and the poor! – to be successful?

I’ll answer the second question first: No.  They hate Trump and conservatives with the heat of a thousand suns and they have shown no reason to believe that they actually want to help the poor.  They could tell just by the stock market reaction just how successful this will be.   Just one example: Having a sale on taxes, so to speak, and letting corporations bring back literally trillions of dollars in profits at much lower tax rates means that we’ll reap billions in taxes that we never would have received otherwise, and that the money will be invested in the U.S.  That means lots of tax $$ and lots of jobs.  What’s not to like – unless you are an America-hating Leftist?

And if they really wanted to help poor blacks, for example, they’d  stop their open borders policies which allow illegals to take jobs and suppress the wages of remaining jobs.  They have had monopolies on education, politics, media and entertainment in inner cities for half a century and yet things keep getting worse for those residents.

A bunch of “Christian” Left drama queens got themselves arrested for an illegal protest and pretended it was because they were reading Bible verses about giving.  Right.  And the verses they read outed them for the frauds that they are, referencing, for example, how Jesus said to lay up treasures in Heaven by giving.  Yes, He said that, but no, He obviously didn’t mean that it involved petitioning Caesar to take from your neighbors by force to redistribute to others via counterproductive social programs.   He said to give your money.  Did I actually have to type that?!  Apparently so.  But wolves like Jim “the Gospel is all about wealth redistribution” Wallis pretended that Jesus really wants us to look to their government god and that the bill is bring brought by a bunch of big meanies trying to hurt the poor.  Uh, yeah, because we make so much money off of jobless poor people or something.  (This is also a good time to remind them that conservatives give more time, money and even blood than Leftists.)

The Left knows they’ll lose power, influence and votes when the tax changes actually help the poor and middle class, so why would they want that?  And before you accuse me of being cynical, keep in mind that the people most likely to cite the Matthew 25 “least of these” passage out of context aggressively advocate for taxpayer-funded abortions to the child’s first breath.  Because compassion.  And giving.  And patriarchy.  And Molech.

And did you notice how Nancy Pelosi, Cokie Roberts and other political and media Leftists have helped cover up sexual predators for decades while insisting that conservatives were waging a war on women?  Why would anyone trust them on anything?

So the answer to the second question is a resounding no.  And to answer the first question: Also no.  Here’s one of my all-time favorite posts explaining why.

Note: The message here is more important than the title indicates.  I’ll eventually share how Leftists literally fail at basic economic concepts and how that has enormous implications for every aspect of society.

I am not making this up: My dog once submitted a college test in Economics and passed.

OK, there is a little more to the story.

When my youngest daughter home-schooled her last two years of high school, the dogs would hang out with her all day.  Once when she was in the middle of an online Economics test one of them jumped on the bed, landed on the keyboard and submitted the partially completed test.  And he passed!  Fortunately, the folks at the school were good sports about the high-tech version of “the dog really ate my homework” story and re-opened the system so the that real student could complete the test (she got her usual 99% or so).

But I offer that as a segue to remind people of an extremely important fact about basic economic principles, namely that those on the Left literally fail at them.  They aren’t just a little worse than Conservatives, they fail horribly and it drives their ideology.  The details are here, but note the results of a simple eight question economics test given to those across the political spectrum (and especially note how my dog fared):

Letter grade
Very Conservative 84% B
Libertarian 83% B
Conservative 79% C+
My dog 72% C
Moderate 54% F
Liberal 41% F
Progressive/very Liberal 34% F

Got that?  Progressives / very Liberal people only get a third of the questions right.  They could double their scores and still only get a D.  But the more conservative people are the better they do, with very Conservative people achieving a solid B.

Here’s an example of one of the questions:

Consider one of the economic propositions in the December 2008 poll: “Restrictions on housing development make housing less affordable.” People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

To recap that example, 2/3 of Leftists don’t know that restrictions — regardless of their merit — always increase costs.  How can they possibly make wise economic decisions?

Do not let the handsome canine below cause you to miss the key takeaways:

  • Understanding these basic economics concepts is crucial to leading properly. Therefore, Leftists should not be in charge of government.  Or economics.  Or much of anything else.  If you can’t get the basic building blocks of society right then all you will do is create more problems.
  • As the good folks at Freaknomics will tell you, Economics isn’t just about seemingly arcane financial metrics.  It is about behavior and incentives.  If you don’t understand how the basics of human nature work then your worldview is doomed to poor decision making.
  • The Law of Unintended Consequences will bite you far worse than my dog ever would (Italian Greyhounds are amazingly friendly) but the truth is that most consequences of Leftist policies are easy to anticipate.  The “War on Poverty” is a perfect example.  It wasn’t just a colossal flop, it was a completely predictable colossal flop.  It has deeply harmed tens of millions of people. We need to undo it as quickly as possible.  Leftists don’t realize or ignore that you get more of whatever you subsidize.  They subsidized single motherhood and got lots more of it, with the inescapable crime and poverty that comes with it.
  • This issue carries over to religion as well.  It is no surprise that Leftist Christian groups do much more harm than good.  False teachers don’t understand economics any better than they do the Bible.
  • All schools should host Junior Achievement classes.  These are proven to increase graduation rates and they teach critical life skills about budgeting, economics and more.  I taught them for 12 years and was continually impressed with their program.  You don’t need a PhD in Economics to understand the most important concepts.  Give me 30 minutes with a bunch of 7th graders and I will have them more fluent in basic economic principles like supply and demand than Congressional Democrats are.  And that isn’t an exaggeration.

 

The way people understand basic economic principles has an enormous influence on how well they will govern.  You should vote accordingly.  And if you love God and neighbor you won’t ignore how He wired the world.

——–

Economist Dog (TM), the hero of this story, could not be reached for comment.  He was on a conference call discussing how the demand for dog food is completely inelastic.   Also, he died last year.  We miss this special little guy!  He and his mate (pictured below) brought us countless blessings and good times and we thank God for that.

bluetooth dog

He also understood intellectual property rights and helped us earn a few $$ when this picture was used on a t-shirt sold by a large retailer.  But mostly he just chased squirrels and then sat on my lap and slept.  Backup Dog (TM) was equally loved but not quite as active.dogs

She was as cerebral as she looks here.
Back Camera

 

Christian worldview, Economics

Free and valuable advice to any business: Stay out of the culture wars and don’t give into Leftist bullies

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And yet another foolish business gets involved in the culture wars and supports Planned Parenthood. This time it was Chili’s — though I heard they stopped the promotion (after the damage was already done).  I left this note at their site:

Hi — I’ve always enjoyed Chili’s but now every time I see one I will think of how you support the largest child-killers in the country, and perhaps the world: Planned Parenthood. They kill children, sell their body parts, protect rapists & sex traffickers, lie about doing prenatal care, and so much more. You used bad judgment.

I realize you can’t boycott everything or you’d starve, but I do avoid business that are more in-your-face with their radical Leftism, such as Target (Motto: “We hate you Christians because you are intolerant bigots who know the difference between men and women, so please spend lots of money here!”).

Another company, which I won’t mention because I don’t want to give them free advertising, thought it would be smart to brag about their support for Planned Parenthood.  They sell cosmetics to women and assumed that the post-#womensmarch #abortionmarch timing would be great.  But it turns out that many loyal customers, including Mrs. Eternity Matters, said, “Buh-bye!”  Most of their Facebook comments were negative, and the business got caught having employees pretending to be customers and offering positive support.  They tried to backtrack and say that they’d planned to rotate the giving to other organizations in the future, but the original post made no mention of that.  And as they doubled-down with one defensive comment after another the opportunity for grace was gone.

The cost of losing customers for life is enormous.  My advice to any Board of Directors and senior management is to never give in to the LGBTQX, Planned Parenthood or other Leftist bullies.  Remember PP’s scorched earth campaign against Komen – a breast cancer charity! – when they tried to part ways. Do not pick up those snakes.  Just tell them you stay out of the culture wars and move on. They may threaten you, but don’t give in.  If your competitors give in and you don’t then you may reap the benefits!

Economics, Financial

Leftist double-fail on economics

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It is bad enough that most Leftists literally fail at basic economics, but to make it worse they deliberately implement counterproductive policies even on the rare occasions when they do understand a simple economic concept.  Via Leaked Podesta Emails Show Clinton and Co. Knew But Didn’t Care That They Would Hurt the Economy:

The head of the liberal Center for American Progress privately warned Democratic presidential nominee Hillary Clinton’s campaign staff against endorsing a $15-an-hour minimum wage, saying that it would be bad for the economy.Despite that, both the Clinton campaign and the center have since promoted state and local activists’ efforts to push a $15 rate, and Clinton has even said she would sign $15 federal legislation.

Go read it all.  It gets worse.

So the Leftist leaders promote causes to benefit themselves knowing that it will hurt those they claim to care about.  Because love and tolerance or something.

This is just like Obama dismissing capital gains tax cuts because they didn’t appear to be “fair,” even though they are known to increase tax revenues.  Even John Kennedy, that notorious right-wing extremist, understood simple concepts like that.

To recap:

  1. Tests show that Leftists literally fail at understanding basic economic concepts, and it drives their terrible policies.
  2. Even when the proverbial blind squirrel finds a nut and the politicians do understand a simple economic concept, they legislate against it because they know that their followers are economically ignorant (hello, government schools!) and they’d rather have votes than actually help the people they claim to care about.
Christian worldview, Economics, False teachers

Leftists increase the misery of those they claim to want to help

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Never confuse productive Biblical giving with wasteful, counterproductive “Christian” Leftist confiscation and redistribution.

I could go on at length about how the Left — including the “Christian” Left —  actually hurt people financially when trying to help them*, but even if their impact was financially neutral they do them a great disservice by fueling their natural covetousness.  Some do this out of ignorance and others out of selfish cynicism — i.e., those who promote minimum wage laws to gain votes even though they know the laws will reduce jobs and benefits.

Their constituents have material blessings that dwarf what royalty had a century or two ago. But they can’t enjoy them, because their Leftist overlords keep them in perpetual bitterness and ungratefulness!  Telling people that they are entitled to what others have nearly eliminates the possibility of them feeling any gratitude.  That is a miserable way to go through life, and the predictable outcome is seen in generation after generation.

The Kenya church and hospital that we support and have visited many times offers a great contrast.  They don’t just throw food at the poor, they teach life skills to aids orphans that let them be independent and to help themselves and others.  And the poor didn’t get EBT cards to spend on junk or sell for cash, they got real food.

We got to witness a monthly food distribution for those who care for children in the AIDS orphan program. These ladies were incredible. They literally sang and danced with such joy after receiving a 30-40 lb. bag of grain, then they put it on their backs to carry it several miles back to their homes. What incredible gratitude!

And this all ignores the indescribable carnage of the Left’s pro-abortion extremism. The Leftists actually rationalize that it is better that you be crushed and dismembered in the womb than that you might live a life of relative poverty.

*Leftists literally fail at basic economics.  My dog did better on an economics test than Leftists.  Seriously.  Sort of.

Economics

Leftist [alleged] good intentions + [indisputable] economic illiteracy = Societal destruction

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yacht_tax

The meme above is a classic example of how Leftists literally fail at basic economics* and how harmful that is to society. Their alleged good intentions drive them to do things like increase taxes on luxury items because they “know” that the rich can afford them and will continue to buy them in the same volume.

But back in reality, the ironclad law of supply and demand — in which I can make a 7th grader fluent in a 30 minute Junior Achievement class — meant that people would buy less luxury items.  That meant less tax revenues from the sales of the luxury items.  And it meant less jobs for the makers of those items.  And it meant less taxes paid by those workers and more taxes consumed by them when they were out of work.

In short, it was an entirely predictable train wreck brought about by the covetousness and economic ignorance of Leftists.  They completely ignore that even fantastically wealthy people like John Kerry will inconvenience themselves by putting assets in more tax-friendly environments.  It is the same ignorance that makes them shocked when businesses move to tax-friendly countries.

Part of being an adult is being able to consider the unintended but predictable consequences of things like tax increases. But what does all that human misery and lost tax revenue matter as long as it made the Leftists think they were being “fair?”

These people should not be allowed to govern until they gain a basic understanding of human nature and economics.

*My dog did better on an economics test than Leftists. Seriously. Sort of. And they really do fail at basic economic principles.  The more conservative someone is, the better they do.

Economics

Subsidies hurt everyone, but mostly the poor

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This should be a common ground issue, But none of the Leftist or RINO politicians will fight them.  Via: So Jeb! now wants to phase out sugar subsidies:

This story is one which delves into some of the dustier corners of the political closet, particularly in Florida. One of the major powerhouses down there in terms of political clout is the sugar industry. They have some of the most well funded lobbyists in the country and their influence weighs heavy on plenty of elections. This is a long running thorn in the side of conservatives because the sugar industry relies heavily on big subsidies and government support programs so they can fight off competition from foreign producers. The crony capitalism is thick in the air around a couple of families who control the industry and they’ve had their hooks into plenty of politicians from both parties. Marco Rubio has taken a lot of cash from these guys and still supports subsidies for them, but this week Jeb! Bush seemed to finally take a stand after years of similar behavior and said that he’s in favor of “phasing out” such subsidies.

Subsidies are pure Crapitalism, keeping deep-pocketed donors rich, prices high, and competitors out of the market.  They need to end.  Every one of them should have, say, a 3-5 year phase-out so as not to be overly disruptive to the marketplace.

Economics

Why are there so few gas stations on one side of a state’s border and so many on the other side?

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Because economics.  Some states have lower tax rates than others and — spoiler alert! — that changes people’s behavior.

2015-09-13 14.40.32

I won’t drive out of my way to save $0.05 per gallon, but I will to save $0.45 per gallon.  And that’s what I did this afternoon.  It was worth over $5 total to drive a couple extra miles.  No, wait, it was fun because I love to save money like that.

Our state’s tax rates have a huge impact on behavior around the border, and for good reason.  It is simple economics (“the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind”).

But here’s the problem: Leftists literally fail at basic economics.  That leads them to make all sorts of bad decisions, whether out of ignorance (e.g., low information voters, big-hearted people who don’t think critically, etc.) or out of malice (e.g., Obama, Clinton, etc.).

For example, they don’t realize that our high corporate tax rates send lots of jobs — and the taxes those employees would have paid — to other countries and divert valuable resources away from productive activities to exercises in finding loopholes. And worse yet, they encourage lobbyists who buy off politicians to create those loopholes.

Leftists think that high tax rates yield more money, but even President Kennedy knew that was wrong.  Obama infamously noted that even if lower capital gains tax rates yielded higher revenues (and they most certainly do) that he would oppose them out of fairness.  That’s Leftist logic, and it is terrible for this country.

Economics

Yea for capitalism: “Time Warner Cable Boosts Internet Speed In Charlotte: Why? Google Fiber”

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You don’t get huge improvements in service from monopolies — including government monopolies.  Yet you do get them when companies must compete.  Time Warner could have done this long ago, but didn’t.  Why are they doing it?  To keep customers from leaving them.

Competition works, people.  Yes, Utopian wimps fear it, but it is great for the rest of us (and even for them, even though they don’t know or appreciate it).  Via Time Warner Cable Boosts Internet Speed In Charlotte: Why? Google Fiber:

Time Warner has confirmed that it is updating their subscribers’ network connection site in Charlotte, North Carolina. Dubbed “TWC Maxx,” the upgrade promises to bring increased speeds by up to six times.

The decision to upgrade comes after Google said it is bringing its own Fiber networking service to Charlotte and Raleigh-Durham; 18 cities in Georgia; and the Nashville metro area. As a way to keep their current residential customers, Time Warner has devised at least three tiers of Internet boosts, all at no added charge.

. . .

Along with the increased Internet speeds, Time Warner also announced that it is enhancing its TV service. This includes an increased storage of up to 1TB for recorded programs, which is twice the previous amount.

Google intended to serve around 3 million people with Internet speeds of up to 1 Gbps. Such speed is said to be over 100 times faster than the current national average. In other words, Google plans to bring high-speed Internet service to the masses.

Time Warner is not the only company that has responded to the threat brought on by Google. In February, AT&T said it will enhance its Internet speeds in Kansas City, including the suburbs, in order to match what Google offers.