Matters of Ecomomics 2

This is an interesting discussion on why governments waste so much money.  Quote: "Maybe the reason fraud is so pervasive is that penalties are trivial or nonexistent. A 2011 DOD report found hundreds of defense contractors that defrauded the U.S. military subsequently went on to receive more than $1.1 trillion in new Pentagon contracts between 2000 and 2010. Shouldn’t criminal companies be barred from subsequent contracts? Shouldn’t crooked company officials be sent to prison? Or do these things not happen because the same folks are also campaign contributors? I don’t know the answer to these questions, but surely something is amiss. It’s almost as if government is simply a racket for the benefit of insiders."    https://fee.org/articles/the-real-reason-government-wastes-so-much-money/?

An assessment of the Trump tax plan. Quote: "What I love most about this plan is its real-world economic foundation. It embraces a truth that so many want to avoid. If you want jobs, rising wages, and economic growth, you have to stop the war on capital. You have to go the other way. You need to celebrate capital and allow rewards to flow to those who are driving forward economic progress.  It’s a simple but brilliant point. Finally, we’ve got a tax proposal that embraces it."  https://fee.org/articles/trump-s-tax-plan-is-brilliant-politics-and-even-better-economics/?

Most of us knew back then that the whole cash for clunkers idea was a loser.  Well some university types have recently confirmed that it was a loser.  Quote: "Three economists (from MIT and Tex A&M) have crunched the numbers and discovered that Obama’s Cash-for-Clunkers scheme back in 2009 was a failure even by Keynesian standards."    https://fee.org/articles/cash-for-clunkers-was-a-complete-failure/?

Quote: "Billionaire real-estate investor Sam Zell said President Donald Trump has an "extraordinary opportunity" to revive an economy that died under eight years of regulatory oppression under Barack Obama.  "I think we've had 8 years of kind of an anti-business administration with very little representation from the business community," Zell told TheStreet.  Zell wasn't fond of President Obama's nearly $1 trillion stimulus plan back in 2009, The Street noted. "I think President Trump has a similar stimulus opportunity but without the debt because he can achieve that goal by deregulation," the Equity Group Investments chairman added."   http://www.newsmax.com/Finance/Economy/Sam-Zell-Trump-Economy-Obama/2017/05/11/id/789622/?

This is a financial issue that has been known for some time by economists and many in government.  But, as usual the government does nothing.  Quote: "I have warned that whenever a government creates a solution to any crisis, that solution becomes the next crisis. This is what I have called the Paradox of Solution.The unfolding of the exit of the central banks from the Quantitative Easing monetary policy will become a much more serious threat to the financial markets than anyone suspects. The Federal Reserve has already exited and begun to raise rates while also announcing it will NOT be reinvesting the money when the government debt they bought expires. The Federal Reserve is already shortening their balance sheet. Bills of $426 billion will be due at the Fed in 2018, and again about $357 billion a year later. So the Fed will not repurchase that debt. The US economy is absorbing this because US dollars are effectively the only real reserve currency in the world right now."   And, "As central banks appeared as omnipotent purchasers of government bonds to the un-savvy trader, the yields of the debt by no means reflect the risk of a default in the country’s payments. The decline in yields masked the rising risks from fiscal mismanagement that has been widespread. While the Federal Reserve had recently announced that it would no longer reinvest its gains on government bonds that had matured into new US securities, the US bond market will need to find new buyers to absorb the additional supply. That may not be a problem right now, but as other government debt moves into crisis, we will see the capital flight from bonds to equities unfold."    https://www.theburningplatform.com/2017/05/15/the-coming-central-bank-crisis/

This is what happens when government executives hook up with big business executives.  Quote: "Tim Carney gave his impressions of this budding relationship between GE and the Obama administration in the DC Examiner last July: First, there’s the policy overlap: Obama wants cap-and-trade, GE wants cap-and-trade. Obama subsidizes embryonic stem-cell research, GE launches an embryonic stem-cell business. Obama calls for rail subsidies, GE hires Linda Daschle [wife of former South Dakota Senator and Obama confidante Tom Dachle] as a rail lobbyist. Obama gives a speeeh, GE employee Chris Matthews feels a thrill up his leg. I could go on. And Carney does go on in a December 2009 Examiner piece: Look at any major Obama policy initiative — healthcare reform, climate-change regulation, embryonic stem-cell research, infrastructure stimulus, electrical transmission smart-grids — and you’ll find GE has set up shop, angling for a way to pocket government handouts, gain business through mandates, or profit from government regulation."    https://www.theburningplatform.com/2017/05/06/the-audacity-of-corporate-cronies/   Obama always said he was for the little guys but actually always worked with the big guys.  Let's hope Trump does not follow that example.

And this item examines the consequences likely when our government kicks cans down the road because they are cowards and do not attack the real problems that they collectively over time have caused.   http://www.conservativezone.com/articles/fiscal-hawks-lose-on-budget-bill/  

Wonder what liberals will think about this?  North Carolina defied the dire predictions of the liberal left that rejectingimplementing.  Quote: "Yeah, that 3 percent corporate income tax rate was one of Governor McCrory’s campaign promises kept, as he slashed both corporate and individual income taxes.  The Prosperity Cup is different from the magazine’s Business Climate rankings, but even in that, the Tar Heel state ranked #2 (behind Georgia).  Among the factors that go into the Prosperity Cup: new and expanded facilities and the capital investment that goes along with them; new jobs created; Business Climate ranking; state tax climate as ranked by the Tax Foundation; and performance in the Beacon Hill Institute’s State Competitiveness Index. For factors such as number of facilities and new jobs, both total numbers and per-capita numbers were considered.  Yeah, that 3 percent corporate income tax rate was one of Governor McCrory’s campaign promises kept, as he slashed both corporate and individual income taxes.  The Prosperity Cup is different from the magazine’s Business Climate rankings, but even in that, the Tar Heel state ranked #2 (behind Georgia).  Among the factors that go into the Prosperity Cup: new and expanded facilities and the capital investment that goes along with them; new jobs created; Business Climate ranking; state tax climate as ranked by the Tax Foundation; and performance in the Beacon Hill Institute’s State Competitiveness Index. For factors such as number of facilities and new jobs, both total numbers and per-capita numbers were considered."   http://www.redstate.com/sweetie15/2017/05/09/defying-liberal-predictions-this-state-outperforms-all-others-in-economic-development-and-appeal/?   

This piece by Walter Williams begs the question: Is President Trump right about trade deficits?  Quote: "When we discuss international trade and balance of payments, there are two types of accounts. There is the current account, which includes goods and services imported and exported and receives the most political attention. In 2016, the American people imported $479 billion worth of goods and services from Chinese producers, and we sold $170 billion worth of goods and services to Chinese customers. That made for a $309 billion current account deficit. In other words, we purchase more goods and services from Chinese producers than Chinese consumers purchase from American producers.  How much of a problem is it when there is a deficit, or a negative imbalance, on current accounts? Let's look at it."    https://townhall.com/columnists/walterewilliams/2017/05/03/trade-ignorance-and-demagoguery-n2320565? 

Government imposed demands for minimum wage unhinged to the cost of doing business is a fooling thing to do.  People get hurt.  Quote: "Washington, D.C. will lose thousands of jobs as the district's plan to raise the minimum wage to $15 goes into effect, while the higher wages will primarily benefit workers in the surrounding suburbs, according to a new report by the city's chief financial officer.  D.C. Mayor Muriel Bowser spearheaded the effort for a $15 minimum wage, more than double the federal minimum wage of $7.25 an hour. Analysis by the city's Office of Revenue Analysis, however, says the plan could cost the district 2,500 jobs by 2026, the Washington Times reports.  The district's minimum wage is currently $11.50 an hour and each year will grow by 70 cents until it reaches $15 in three years. After 2020, the minimum wage will grow based on inflation."   And, "D.C. restaurants lost 1,400 jobs in the first six months of 2016 and experienced their worst hiring period in 15 years. Suburbs in Virginia and Maryland added nearly 3,000 jobs over the same period."    http://freebeacon.com/issues/dc-report-jobs-lost-minimum-wage-hike-goes-into-effect/

Many economic experts believe the establishment of the Federal Reserve was one of the biggest mistakes our government has ever made.  That is my opinion, too.  This item provides help us understand why.  Quote: "There can be no doubt that, as the audit bill advances through the legislative process, the Fed and its allies will ramp up both public and behind-the-scenes efforts to kill the bill. Can anyone dismiss the possibility that Janet Yellen will attempt to “persuade” Donald Trump to drop his support for Audit the Fed in exchange for an “accommodative” monetary policy that supports the administration’s proposed spending on overseas militarism and domestic infrastructure?  While auditing the Fed is supported by the vast majority of Americans, it is opposed by powerful members of the financial elite and the deep state. Therefore, those of us seeking to change our national monetary policy must redouble our efforts to force Congress to put America on a path to liberty, peace, and prosperity by auditing, then ending, the Fed."    https://www.theburningplatform.com/2017/04/17/the-federal-reserve-is-and-always-has-been-politicized/