Category Archives: Economist Dan Mitchell

Open letter to President Obama (Part 510) (What Can We Cut to Balance the Budget)

February 3, 2014 – 1:29 am

Open letter to President Obama (Part 510)

(Emailed to White House on 4-15-13.)

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

___________________

Why not try and seriously cut spending so you can balance the budget?

What Can We Cut to Balance the Budget

Published on Oct 16, 2012

If the U.S. government cut all government services except Social Security, Medicare, Medicaid, and payments on the debt, federal spending would still outpace revenues. Prof. Antony Davies argues that there are not specific cuts that will enable government to balance the budget. He says, “Nothing less than a redesign will solve this problem.” That redesign should begin by determining what the proper role of government is.

___________________________

I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control.

The President is supposed to release his FY2014 budget tomorrow, more than two months later than required by law.

Based on what it’s rumored to contain, I’ve already explained that nobody should be tricked into thinking that Obama is moving to the center. Though he may not be as far to the left as Senate Democrats.

Not that it would be easy to get to the left of that plan, as cartoonists have ably illustrated.

Anyhow, much of Washington is buzzing about what might be in the President’s proposal.

Well, time to sate your curiosity. I have a leaked copy of the budget for your enjoyment.

Leaked Obama Budget Cartoon

We won’t see actual numbers until tomorrow, but I’m guessing that I’ll be sharing something very similar to the analysis I provided last year and the year before.

P.S. If you enjoy political humor, the Glenn McCoy cartoon in this post is a pretty good summary of what Obama will say in his budget message.

______________________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

Related posts:

Cartoons from Dan Mitchell’s blog that demonstrate what Obama is doing to our economy Part 2

Max Brantley is wrong about Tom Cotton’s accusation concerning the rise of welfare spending under President Obama. Actually welfare spending has been increasing for the last 12 years and Obama did nothing during his first four years to slow down the rate of increase of welfare spending. Rachel Sheffield of the Heritage Foundation has noted: […]

Cartoons from Dan Mitchell’s blog that demonstrate what Obama is doing to our economy Part 1

  I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. I think Max Brantley of the Arkansas Times Blog was right to point out on 2-6-13 that Hillary […]

Great cartoon from Dan Mitchell’s blog on government moochers

I thought it was great when the Republican Congress and Bill Clinton put in welfare reform but now that has been done away with and no one has to work anymore it seems. In fact, over 40% of the USA is now on the government dole. What is going to happen when that figure gets over […]

Gun Control cartoon hits the internet

Again we have another shooting and the gun control bloggers are out again calling for more laws. I have written about this subject below  and on May 23, 2012, I even got a letter back from President Obama on the subject. Now some very interesting statistics below and a cartoon follows. (Since this just hit the […]

“You-Didn’t-Build-That” comment pictured in cartoons!!!

watch?v=llQUrko0Gqw] The federal government spends about 10% on roads and public goods but with the other money in the budget a lot of harm is done including excessive regulations on business. That makes Obama’s comment the other day look very silly. A Funny Look at Obama’s You-Didn’t-Build-That Comment July 28, 2012 by Dan Mitchell I made […]

Cartoons about Obama’s class warfare

I have written a lot about this in the past and sometimes you just have to sit back and laugh. Laughing at Obama’s Bumbling Class Warfare Agenda July 13, 2012 by Dan Mitchell We know that President Obama’s class-warfare agenda is bad economic policy. We know high tax rates undermine competitiveness. And we know tax increases […]

Cartoons on Obama’s budget math

Dan Mitchell Discussing Dishonest Budget Numbers with John Stossel Uploaded by danmitchellcato on Feb 11, 2012 No description available. ______________ Dan Mitchell of the Cato Institute has shown before how excessive spending at the federal level has increased in recent years. A Humorous Look at Obama’s Screwy Budget Math May 31, 2012 by Dan Mitchell I’ve […]

Funny cartoon from Dan Mitchell’s blog on Greece

Sometimes it is so crazy that you just have to laugh a little. The European Mess, Captured by a Cartoon June 22, 2012 by Dan Mitchell The self-inflicted economic crisis in Europe has generated some good humor, as you can see from these cartoons by Michael Ramirez and Chuck Asay. But for pure laughter, I don’t […]

Obama on creating jobs!!!!(Funny Cartoon)

Another great cartoon on President Obama’s efforts to create jobs!!! A Simple Lesson about Job Creation for Barack Obama December 7, 2011 by Dan Mitchell Even though leftist economists such as Paul Krugman and Larry Summers have admitted that unemployment insurance benefits are a recipe for more joblessness, the White House is arguing that Congress should […]

Get people off of government support and get them in the private market place!!!!(great cartoon too)

Dan Mitchell hits the nail on the head and sometimes it gets so sad that you just have to laugh at it like Conan does. In order to correct this mess we got to get people off of government support and get them in the private market place!!!! Chuck Asay’s New Cartoon Nicely Captures Mentality […]

2 cartoons illustrate the fate of socialism from the Cato Institute

Cato Institute scholar Dan Mitchell is right about Greece and the fate of socialism: Two Pictures that Perfectly Capture the Rise and Fall of the Welfare State July 15, 2011 by Dan Mitchell In my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that […]

Cartoon demonstrates that guns deter criminals

John Stossel report “Myth: Gun Control Reduces Crime Sheriff Tommy Robinson tried what he called “Robinson roulette” from 1980 to 1984 in Central Arkansas where he would put some of his men in some stores in the back room with guns and the number of robberies in stores sank. I got this from Dan Mitchell’s […]

Gun control posters from Dan Mitchell’s blog Part 2

I have put up lots of cartons and posters from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. Amusing Gun Control Picture – Circa 1999 April 3, 2010 by Dan Mitchell Dug this gem out […]

We got to cut spending and stop raising the debt ceiling!!!

  We got to cut spending and stop raising the debt ceiling!!! When Governments Cut Spending Uploaded on Sep 28, 2011 Do governments ever cut spending? According to Dr. Stephen Davies, there are historical examples of government spending cuts in Canada, New Zealand, Sweden, and America. In these cases, despite popular belief, the government spending […]

Gun control posters from Dan Mitchell’s blog Part 1

I have put up lots of cartons and posters from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. On 2-6-13 the Arkansas Times Blogger “Sound Policy” suggested,  “All churches that wish to allow concealed […]

Taking on Ark Times bloggers on the issue of “gun control” (Part 3) “Did Hitler advocate gun control?”

Gun Free Zones???? Stalin and gun control On 1-31-13 ”Arkie” on the Arkansas Times Blog the following: “Remember that the biggest gun control advocate was Hitler and every other tyrant that every lived.” Except that under Hitler, Germany liberalized its gun control laws. __________ After reading the link  from Wikipedia that Arkie provided then I responded: […]

Taking on Ark Times bloggers on the issue of “gun control” (Part 2) “Did Hitler advocate gun control?”

On 1-31-13 I posted on the Arkansas Times Blog the following: I like the poster of the lady holding the rifle and next to her are these words: I am compensating for being smaller and weaker than more violent criminals. __________ Then I gave a link to this poster below: On 1-31-13 also I posted […]

 

By Everette Hatcher III | Also posted in Cato Institute, President Obama, spending out of control | Comments (0)

Open letter to President Obama (Part 508) (Margaret Thatcher and the Battle of the 364 Keynesians)

January 30, 2014 – 1:24 am

Open letter to President Obama (Part 508)

(Emailed to White House on 4-15-13.)

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

___________________

You can not stimulate the economy by spending more money. The only way you can is by cutting spending and cutting tax rates on the job creators.

Does Stimulus Spending Work?

After the housing bubble burst, the Bush and Obama administrations turned to stimulus in an effort to “create jobs.” Does such spending lead to economic improvement? Prof. Antony Davies examines the data to see how increases in federal spending relate to economic growth from 1955 to the present. The evidence shows that there is no connection between federal spending and economic improvement; instead, stimulus money only increases government debt. After three years of stimulus spending, the unemployment rate remains at 9 percent. “One thing that has changed,” Davies says, “is that our government is now $4.6 trillion further in debt than it was before the stimulus efforts.”

__________________________

The stimulus program was a failure here in America and you should have known better than to try that. You should have been a better student of history like Margaret Thatcher was.

APRIL 9, 2013 3:24PM

Margaret Thatcher and the Battle of the 364 Keynesians

By

STEVE H. HANKE

With the death of Margaret Thatcher, and the ensuing profusion of commentary on her legacy, it is worth looking back at an overlooked chapter in the Thatcher story. I am referring to her 1981 showdown with the Keynesian establishment—a showdown that the Iron Lady won handily. Before getting caught up with the phony “austerity vs. fiscal stimulus” debate, the chattering classes should take note of how Mrs. Thatcher debunked the Keynesian “fiscal factoid.”

According to the Oxford English Dictionary, a factoid is “an item of unreliable information that is reported and repeated so often that it becomes accepted as fact.” The standard Keynesian fiscal policy prescription for the maintenance of non-inflationary full employment is a fiscal factoid. The chattering classes can repeat this factoid on cue: to stimulate the economy, expand the government’s deficit (or shrink its surplus); and to rein in an overheated economy, shrink the government’s deficit (or expand its surplus).

Even the economic oracles embrace the fiscal factoid. That, of course, is one reason that the Keynesians’ fiscal mantra has become a factoid. No less than Nobelist Paul Krugman repeats it ad nauseam. Now, the new secretary of the treasury, Jack Lew (who claims no economic expertise), is in Europe peddling the fiscal factoid.

Unfortunately, the grim reaper finally caught up with Margaret Thatcher—but not before she laid waste to 364 wrong-headed British Keynesians.

In 1981, Prime Minister Thatcher made a dash for confidence and growth via a fiscal squeeze. To restart the economy, Mrs. Thatcher instituted a fierce attack on the British fiscal deficit, coupled with an expansionary monetary policy. Her moves were immediately condemned by 364 distinguished economists. In a letter to The Times, they wrote a knee-jerk Keynesian response: “Present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.”

Mrs. Thatcher was quickly vindicated. No sooner had the 364 affixed their signatures to that letter than the economy boomed. Confidence in the British economy was restored, and Mrs. Thatcher was able to introduce a long series of deep, free-market reforms.

As for the 364 economists (who included seventy-six present or past professors, a majority of the Chief Economic Advisors to the Government in the post-WWII period, and the president, as well as nine present or past vice-presidents, and the secretary general of the Royal Economic Society), they were not only wrong, but also came to look ridiculous.

In the United States, the peddlers of the fiscal factoid have never suffered the intellectual humiliation of their British counterparts. In consequence, American Keynesians can continue to peddle snake oil with reckless abandon and continue to influence policy in Washington, D.C., and elsewhere.

_________________

I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control.

Classic Cartoon on So-Called Stimulus Is Amusing and Economically Accurate

February 6, 2012 by Dan Mitchell

People often ask why I put so much political humor on this site. The easy answer is that I like a good joke.

But I also find that some cartoons and jokes do a very good job of helping people understand economics. I’ve always liked this cartoon, for instance, because it cleverly illustrates the impact of government handouts on the labor market. And looking at that cartoon is a lot quicker than taking a class about labor economics.

Well, you can also skip the class about public finance. Here’s a cartoon that shows the economic burden of government “stimulus” spending.

Very funny and very intellectually sound. Indeed, the only thing that would have made the cartoon even better would have been showing that the jockey became bloated by eating the horse’s food. But I reckon it’s not easy making multiple points with one picture.

Anyhow, I’m disappointed that I didn’t notice it at Reason.com a couple of years ago when the debate on the faux stimulus was taking place. It probably would have helped more people understand that you don’t boost economic performance by draining resources from the productive sector of the economy to finance a larger government.

By the way, if you want to understand in greater detail why the cartoon is accurate, this video on Keynesian economics is helpful, as is this video explaining the failure of Obama’s $1 trillion boondoggle.

______________________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

Related posts:

Cartoons from Dan Mitchell’s blog that demonstrate what Obama is doing to our economy Part 2

Max Brantley is wrong about Tom Cotton’s accusation concerning the rise of welfare spending under President Obama. Actually welfare spending has been increasing for the last 12 years and Obama did nothing during his first four years to slow down the rate of increase of welfare spending. Rachel Sheffield of the Heritage Foundation has noted: […]

Cartoons from Dan Mitchell’s blog that demonstrate what Obama is doing to our economy Part 1

  I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. I think Max Brantley of the Arkansas Times Blog was right to point out on 2-6-13 that Hillary […]

Great cartoon from Dan Mitchell’s blog on government moochers

I thought it was great when the Republican Congress and Bill Clinton put in welfare reform but now that has been done away with and no one has to work anymore it seems. In fact, over 40% of the USA is now on the government dole. What is going to happen when that figure gets over […]

Gun Control cartoon hits the internet

Again we have another shooting and the gun control bloggers are out again calling for more laws. I have written about this subject below  and on May 23, 2012, I even got a letter back from President Obama on the subject. Now some very interesting statistics below and a cartoon follows. (Since this just hit the […]

“You-Didn’t-Build-That” comment pictured in cartoons!!!

watch?v=llQUrko0Gqw] The federal government spends about 10% on roads and public goods but with the other money in the budget a lot of harm is done including excessive regulations on business. That makes Obama’s comment the other day look very silly. A Funny Look at Obama’s You-Didn’t-Build-That Comment July 28, 2012 by Dan Mitchell I made […]

Cartoons about Obama’s class warfare

I have written a lot about this in the past and sometimes you just have to sit back and laugh. Laughing at Obama’s Bumbling Class Warfare Agenda July 13, 2012 by Dan Mitchell We know that President Obama’s class-warfare agenda is bad economic policy. We know high tax rates undermine competitiveness. And we know tax increases […]

Cartoons on Obama’s budget math

Dan Mitchell Discussing Dishonest Budget Numbers with John Stossel Uploaded by danmitchellcato on Feb 11, 2012 No description available. ______________ Dan Mitchell of the Cato Institute has shown before how excessive spending at the federal level has increased in recent years. A Humorous Look at Obama’s Screwy Budget Math May 31, 2012 by Dan Mitchell I’ve […]

Funny cartoon from Dan Mitchell’s blog on Greece

Sometimes it is so crazy that you just have to laugh a little. The European Mess, Captured by a Cartoon June 22, 2012 by Dan Mitchell The self-inflicted economic crisis in Europe has generated some good humor, as you can see from these cartoons by Michael Ramirez and Chuck Asay. But for pure laughter, I don’t […]

Obama on creating jobs!!!!(Funny Cartoon)

Another great cartoon on President Obama’s efforts to create jobs!!! A Simple Lesson about Job Creation for Barack Obama December 7, 2011 by Dan Mitchell Even though leftist economists such as Paul Krugman and Larry Summers have admitted that unemployment insurance benefits are a recipe for more joblessness, the White House is arguing that Congress should […]

Get people off of government support and get them in the private market place!!!!(great cartoon too)

Dan Mitchell hits the nail on the head and sometimes it gets so sad that you just have to laugh at it like Conan does. In order to correct this mess we got to get people off of government support and get them in the private market place!!!! Chuck Asay’s New Cartoon Nicely Captures Mentality […]

2 cartoons illustrate the fate of socialism from the Cato Institute

Cato Institute scholar Dan Mitchell is right about Greece and the fate of socialism: Two Pictures that Perfectly Capture the Rise and Fall of the Welfare State July 15, 2011 by Dan Mitchell In my speeches, especially when talking about the fiscal crisis in Europe (or the future fiscal crisis in America), I often warn that […]

Cartoon demonstrates that guns deter criminals

John Stossel report “Myth: Gun Control Reduces Crime Sheriff Tommy Robinson tried what he called “Robinson roulette” from 1980 to 1984 in Central Arkansas where he would put some of his men in some stores in the back room with guns and the number of robberies in stores sank. I got this from Dan Mitchell’s […]

Gun control posters from Dan Mitchell’s blog Part 2

I have put up lots of cartons and posters from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. Amusing Gun Control Picture – Circa 1999 April 3, 2010 by Dan Mitchell Dug this gem out […]

We got to cut spending and stop raising the debt ceiling!!!

  We got to cut spending and stop raising the debt ceiling!!! When Governments Cut Spending Uploaded on Sep 28, 2011 Do governments ever cut spending? According to Dr. Stephen Davies, there are historical examples of government spending cuts in Canada, New Zealand, Sweden, and America. In these cases, despite popular belief, the government spending […]

Gun control posters from Dan Mitchell’s blog Part 1

I have put up lots of cartons and posters from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. On 2-6-13 the Arkansas Times Blogger “Sound Policy” suggested,  “All churches that wish to allow concealed […]

Taking on Ark Times bloggers on the issue of “gun control” (Part 3) “Did Hitler advocate gun control?”

Gun Free Zones???? Stalin and gun control On 1-31-13 ”Arkie” on the Arkansas Times Blog the following: “Remember that the biggest gun control advocate was Hitler and every other tyrant that every lived.” Except that under Hitler, Germany liberalized its gun control laws. __________ After reading the link  from Wikipedia that Arkie provided then I responded: […]

Taking on Ark Times bloggers on the issue of “gun control” (Part 2) “Did Hitler advocate gun control?”

On 1-31-13 I posted on the Arkansas Times Blog the following: I like the poster of the lady holding the rifle and next to her are these words: I am compensating for being smaller and weaker than more violent criminals. __________ Then I gave a link to this poster below: On 1-31-13 also I posted […]

By Everette Hatcher III | Posted in Arkansas Times, Gun Control | Edit | Comments (0)

By Everette Hatcher III | Also posted in Cato Institute, President Obama | Comments (0)

Do you have a right to other people’s money? If it takes you a few seconds to think about the answer then you are a socialist!!!

January 29, 2014 – 6:55 am

_____________

Do you have a right to other people’s money? If it takes you a few seconds to think about the answer then you are a socialist!!!

One of the many differences between advocates of freedom and supporters of statism is how they view “rights.”

Libertarians, along with many conservatives, believe in the right to be left alone and not molested by government. This is sometimes referred to in the literature as “negative liberty,” which is just another way of saying “the absence of coercive constraint on the individual.”

Statists, by contrast, believe in “positive liberty.” This means that you have a “right” to things that the government will give you. Which means, of course, that the government has an obligation to take things from somebody else. How else, after all, will the government satisfy your supposed right to a job, education, healthcare, housing, etc.

Sometimes, the statists become very creative in their definition of rights.

You may laugh at these examples, particularly the ones that focus on seemingly trivial issues.

But don’t laugh too hard, because our friends on the left are busy with very grandiose plans for more “positive liberty.”

The EU Observer reports on efforts in Europe to create expanded rights to other people’s money.

Austerity programmes agreed with the troika of international lenders (the European Commission, European Central Bank and International Monetary Fund) are in breach of the EU’s Charter of Fundamental Rights, according to a German legal expert. …under the EU charter of fundamental rights, a legal text which became binding for member states in 2009, several austerity measures enshrined in the MoUs can be fought in courts. …His study highlights that the MoUs “have seriously limited the autonomy of employers and trade unions to negotiate wages.” …Education and health care reforms prescribed in the memorandums are also questionable because they are focusing too much on cutting budgets, he said. …He noted that the concept of “financial stability” was put above all other considerations. “But financial stability cannot be achieved without social stability,” he said.

But it’s not just one oddball academic making these claims.

…the Council of Europe’s social rights committee noted that public policies since 2009 have been unable to stem a generalised increase in poverty on the continent. The committee identified some 180 violations of European Social Charter provisions on access to health and social protection across 38 European countries. In the bailed-out countries, the committee found several breaches – particularly in terms of wages and social benefits. Ireland was found in breach of the social charter for not ensuring the minimum levels of sickness, unemployment, survivor’s, employment injury and invalidity benefits. Greece and Cyprus have “inadequate” minimum unemployment, sickness, maternity and old age benefits, as well as a restrictive social security system. Spain also pays too little to workers on sick leave.

This crazy thinking also exists in the United States. A former Carter Administration official, now a law professor at Georgetown, has written that countries with good policy must change their systems in order to enable more tax revenue in nations with bad policy.

Do states like Switzerland, which provide a tax haven for wealthy citizens of developing countries, violate internationally recognized human rights? …bank secrecy has a significant  human rights impact if governments of developing countries are deprived of resources needed to meet basic economic rights guaranteed by the United Nations Covenant on Economic, Social, and Cultural Rights. …The Covenant explicitly recognizes individual rights to adequate food, clothing, and housing (Article 11); health care, clean water, and sanitation (Article 12); and education (Article 13). The Covenant also imposes obligations on member states to implement these rights.

And the right to redistribution isn’t just part of the U.N. mission.

There’s also a European set of Maastricht Principles which supposedly obligates nations to help each expand the burden of government.

Articles 19 and 20 of The Maastricht Principles call on states to “refrain from conduct which nullifies or impairs the enjoyment and exercise of economic . . . rights of persons outside their territories . . . or which impairs the ability of another State to comply with that State’s . . . obligations as regards economic rights.” …recognizing the fact that secrecy for offshore accounts makes it difficult for developing countries to implement Covenant obligations. It therefore seems indisputable that offshore accounts impede the fulfillment of internationally recognized human rights.

You may be thinking that all this sounds crazy. And you’re right.

You may be thinking that it’s insane to push global schemes for bigger government at the very point when the welfare state is collapsing. And you’re right.

You may be thinking that it’s absurd to trample national sovereignty in pursuit of bad policy. And you’re right.

And you may be thinking this is a complete bastardization of what America’s Founding Fathers had in mind. And you’re right.

But you probably don’t understand that this already is happening. The IRS’s awful FATCA legislation, for instance, is basically designed for exactly the purpose of coercing other nations into enforcing bad American tax policy.

Even more worrisome is the OECD’s Orwellian Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which is best viewed as a poisonous acorn that will grow into a deadly World Tax Organization oak tree.

P.S. And the Obama Administration already is pushing policies to satisfy the OECD’s statist regime. The IRS recently pushed through a regulation that says American banks have to put foreign tax law above U.S. tax law.

P.P.S. Statists may be evil, but they’re not stupid. They understand that tax havens and tax competition are a threat to big government.

Related posts:

“Friedman Friday” Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

George Washington on the subject of religious liberty

Was George Washington our best president ever? I have written before that I thought that he was. Morning Bell: George Washington’s Example on Religious Liberty Julia Shaw February 18, 2013 at 8:20 am Instead of celebrating George Washington’s birthday, today we’ve lumped him in together with no-names including Millard Fillmore and William Henry Harrison as […]

Milton Friedman believed in liberty (Interview by Charlie Rose of Milton Friedman part 1)

Charlie Rose interview of Milton Friedman My favorite economist: Milton Friedman : A Great Champion of Liberty  by V. Sundaram   Milton Friedman, the Nobel Prize-winning economist who advocated an unfettered free market and had the ear of three US Presidents – Nixon, Ford and Reagan – died last Thursday (16 November, 2006 ) in San Francisco […]

Arkansas got ripped off in 1971 Liberty Bowl against Tennessee

Go to 21 minute mark to see video footage of Liberty Bowl between Arkansas and Tennessee Was Arkansas ripped off in the 1971 Liberty Bowl against Tennessee? First off I want to make it clear that I was pulling for Arkansas and I am biased. Therefore, I am just going to use Tennessee sources to […]

Big government means overpaid bureaucrats who loaf and it encourages dishonesty!!!!

Many people that wok in the government are decent people, but also there is another side to this story too. Big government means overpaid bureaucrats who loaf and it encourages dishonesty!!!! Are Government Bureaucrats Corrupt and Dishonest? January 25, 2014 by Dan Mitchell I don’t like government bureaucrats. Actually, let me re-phrase that statement. I know lots of […]

Making America more like France will not help the poor in the USA!!!!

Making America more like France will not help the poor in the USA!!!! Dan Mitchell Defending Honest Wealth from OWS Looters Everything You Ever Needed to Know about the Left’s View of Income Inequality, Captured in a Single Image January 26, 2014 by Dan Mitchell If you want to know why the left is wrong about […]

Obamacare’s sinking ship is sad to watch!!!

______ Oklahoma Doctors vs. Obamacare Obamacare’s sinking ship is sad to watch!!! Drilling More Holes in Obamacare’s Sinking Ship January 23, 2014 by Dan Mitchell The President’s main “accomplishment” has been such a disaster that I wonder whether it’s time to feel sorry for Obama. And if you looked in the dictionary for a definition of Schadenfreude, you might […]

Big Government cronyism lines the pockets of dishonest companies!!!!

  Big Government cronyism lines the pockets of dishonest companies!!!! The Biggest Impediment for the Poor Is Government, not Inequality January 21, 2014 by Dan Mitchell A bunch of well-connected rich people and government officials are descending upon Switzerland for the annual World Economic Forum meeting in Davos. This upsets many people, and perhaps with some […]

By Everette Hatcher III | Also posted in Cato Institute, spending out of control | Comments (0)

Open letter to President Obama (Part 506) (Obama Administration Wants to Subsidize Banks to Make More Dodgy Loans)

January 28, 2014 – 1:16 am

Open letter to President Obama (Part 506)

(Emailed to White House on 4-15-13.)

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

___________________

Why do  you  want to get people with bad credit loans?

Let’s assume you didn’t understand how a garbage disposal worked and, for whatever reason, you decided to stick your arm in one and turn it on. You would do some serious injury to your hand.

The rest of us would wonder what motivated you to stick your arm down the drain in the first place, but we would feel sympathy because you didn’t realize bad things would happen.

But if you then told us that you were planning to do the same thing tomorrow, we would think you were crazy. Didn’t you learn anything, we would ask?

Seems like a preposterous scenario, but something very similar is now happening in Washington. The Obama Administration is proposing to once again put the economy at risk by subsidizing banks to give mortgages to people with poor credit.

“Let’s party like it’s 2006!”

Even though we’re still dealing with the economic and fiscal damage caused by the last episode of government housing subsidies!

Here are some of the unbelievable details from a report in the Washington Post.

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit…officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default. Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Brings to mind the famous saying from George Santayana that, “Those who cannot remember the past are condemned to repeat it.”

But what’s especially amazing – and distressing – about this latest scheme is that “the past” was only a couple of years ago. Or, to recall my odd analogy, one of our hands is still mangled and bleeding and we’re thinking about putting our other hand in the disposal.

Some people understand this is a nutty idea.

…critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars. “If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute.

What’s also discouraging is that the government already is deeply involved in the housing market – even though this is an area where there is no legitimate role for the federal intervention.

Deciding which borrowers get loans might seem like something that should be left up to the private market. But since the financial crisis in 2008, the government has shaped most of the housing market, insuring between 80 percent and 90 percent of all new loans, according to the industry publication Inside Mortgage Finance. It has done so primarily through the Federal Housing Administration, which is part of the executive branch, and taxpayer-backed mortgage giants Fannie Mae and Freddie Mac, run by an independent regulator.

So I guess the goal is to have taxpayers on the hook for 100 percent of loans.

“Don’t worry, it’s not our money”

Anybody want to guess whether this will end well?

By the way, this is bad policy even if we somehow avoid a new bubble and big taxpayer losses. Even in a”best case” scenario, the federal government will be distorting the allocation of capital by discouraging business investment and subsidizing residential real estate.

And as shown in this powerful chart, that will have adverse consequences for wages and living standards.

The part of the article that most nauseated me was a quote from the head bureaucrat at the Federal Housing Administration.

“My view is that there are lots of creditworthy borrowers that are below 720 or 700 — all the way down the credit-score spectrum,” Galante said. “It’s important you look at the totality of that borrower’s ability to pay.”

Gee, isn’t that nice that Ms. Galante thinks there are lots of borrowers with good “totality” measures? But here’s an interesting concept. Why doesn’t she put her money at risk instead of making me the involuntary guarantor on these dodgy loans?

I’ve already said on TV that we should dump Fannie Mae and Freddie Mac in the Potomac River. And I’ve  argued that the entire Department of Housing and Urban Development should be razed to the ground.

But perhaps this cartoon best shows the consequences of the Obama Administration’s new subsidy scheme.

P.S. We also should get rid of housing preference in the tax code. Our economy should cater to the underlying preferences of consumers, not the electoral interests of politicians.

____________

Here is the transcript:

HARWOOD: A lot of people look at the housing mess and say, what happened. When you think about it, is it principally a problem of speculators, or do you think that government may have played a role by elevating the goal of homeownership too broadly beyond the capacity of large numbers of people to handle it?

Sen. OBAMA: Well, I think that there were a combination of forces. Obviously, we’ve had very low interest rates for a long time, and rising, as a consequence, rising housing prices for a long time, which made people feel that housing prices can only go up and only–and never go down. And then that made everybody, consumers, lenders, all feel a little bit too complacent. We had a fundamental failure, though, in government regulation, and I think that was a real problem. We had a government that was not paying attention to loans that were being made on assets that were shaky. You know, you had mortgage lenders engaging in practices that were not sound but because they could immediately sell off those loans and bundle them, and you know, nobody was minding the store. The government should have, at a certain point, stepped in and said, `We’ve got to tighten up these lending standards or we’re going to be building a house of cards.’ And that sort of transparency and accountability in the marketplace, that’s not anti-market, that’s pro-market. One of the things that’s always worked for us, it’s been one of our competitive advantages, is people can trust that if they invest in our markets, that they know what they’re getting. And in the housing market in this situation, that–our government didn’t do its job.

I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control.

This cartoon is not new, but it succinctly captures what happened with that part of the TARP bailout. The only thing missing is some way of showing the government officials and political insiders who received undeserved wealth while the Fannie-Freddie scam was operating.

_________

 

______________________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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Big government means overpaid bureaucrats who loaf and it encourages dishonesty!!!!

January 27, 2014 – 7:26 am

Many people that wok in the government are decent people, but also there is another side to this story too. Big government means overpaid bureaucrats who loaf and it encourages dishonesty!!!!

I don’t like government bureaucrats.

Actually, let me re-phrase that statement. I know lots of people who work for different agencies in Washington and most of them seem like decent people.

So maybe what I really want to say is that I’m not a big fan of government bureaucracies and the results they generate. Why?

Because a bloated government means overpaid bureaucrats, both at the federal level and state level (and in other nations as well).

Because inefficient bureaucracies enable loafing and bad work habits.

Because being part of the government workforce even encourages laziness!

And it may even be the case that government bureaucracies attract dishonest people. A story in the L.A. Times reveals that there’s a correlation between cheating and a desire to work for the government.

Here are some excerpts.

College students who cheated on a simple task were more likely to want government jobs, researchers from Harvard University and the University of Pennsylvania found in a study of hundreds of students in Bangalore, India. Their results, recently released as a working paper by the National Bureau of Economic Research, suggest that one of the contributing forces behind government corruption could be who gets into government work in the first place. …Researchers ran a series of experiments with more than 600 students finishing up college in India. In one task, students had to privately roll a die and report what number they got. The higher the number, the more they would get paid. Each student rolled the die 42 times. …Cheating seemed to be rampant: More than a third of students had scores that fell in the top 1% of the predicted distribution, researchers found. Students who apparently cheated were 6.3% more likely to say they wanted to work in government, the researchers found.

I’m not surprised. Just as the wrong type of people often are attracted to politics, we shouldn’t be surprised to learn that less-than-admirable folks sometimes are attracted to jobs in the bureaucracy.

But I don’t want to draw too many conclusions from this research.

The study looked at people in India and that nation’s government is infamous for rampant corruption.

However, if you look at how America scores in that regard (corruption measures are included in both Economic Freedom of the World and the Index of Economic Freedom), the problem is much less severe.

So even though I’m willing to believe that bureaucrats in America are more prone to bad habits than their private-sector counterparts, I don’t think many of them decide to get government jobs in the expectation that they can extract bribes.

Indeed, I would guess that the average American bureaucrat is far more honest than the average American politician.

That’s damning with faint praise, I realize, but it underscores an important point that the real problem is big government. That’s what enables massive corruption in Washington.

P.S. Switching gears, I’ve written a couple of times about the intrusive and destructive Foreign Account Tax Compliance Act. Well, we have some good news on that front. The Republican National Committee has endorsed the law’s repeal. I don’t want to pretend that’s a momentous development and I even told Reuters that the GOP may only be taking this step for narrow political reasons.

Daniel Mitchell, a senior fellow at the Cato Institute, a libertarian think tank, said: “It’s hard to imagine an issue this obscure playing a visible role in elections … It is making overseas Americans far more sympathetic to (Republicans) and could have an impact on fundraising.”

That being said, I’m more than happy when politicians happen to do the right thing simply because it’s in their self interest. And if we can eventually undo FATCA and enable more tax competition, that’s good news for America and the rest of the world.

P.P.S. And here’s another positive update on a topic we’ve examined before. Governor Rick Perry of Texas has joined a growing list of people who are having second thoughts about the War on Drugs. Here’s an excerpt from a report in the Washington Post.

Texas Gov. Rick Perry (R) on Thursday voiced support for softening penalties for marijuana use, and touted his work moving in the direction of decriminalization. “After 40 years of the war on drugs, I can’t change what happened in the past. What I can do as the governor of the second largest state in the nation is to implement policies that start us toward a decriminalization and keeps people from going to prison and destroying their lives, and that’s what we’ve done over the last decade,” Perry said, according to the Austin American-Statesman.

He joins a growing list of people – such as John Stossel, Gary Johnson, John McCain,  Mona Charen, Pat Robertson, Cory Booker, and Richard Branson – who are recognizing that it’s foolish to give government massive amounts of power and money simply to stop people from doing dumb things to themselves.

But maybe you disagree with all those people and would rather be on the same side as Hillary Clinton.

And make life easier for the folks in this cartoon.

P.P.P.S. I’ve written before about how leftists always criticize so-called tax havens, even though rich statists are among the biggest beneficiaries of these low-tax jurisdictions.

President Obama, for instance, has been so critical of tax havens that he’s been caught making utterly dishonest statements on the topic.

But I guess the President’s opposition to tax competition is less important than his desire to prop up Obamacare. Look at some of what’s been reported by Bloomberg.

…the job of taking over construction of HealthCare.gov, which failed miserably when it debuted in October, is going to Accenture Plc, which switched its place of incorporation in 2009 to Ireland from Bermuda. …Accenture has endured so much criticism over the years for its use of tax havens that it even has a disclosure in its annual report warning investors to expect as much. …Accenture’s roots date back to a once-iconic American business, which helps explain why it’s gotten a lot of heat for incorporating in tax havens since spinning off.

By the way, it makes sense for Accenture to be domiciled in Bermuda rather than the United States.

P.P.P.P.S. On a personal note, I’m down in Florida for my first softball tournament of the year and I’m happy to report that I managed to put one over the fence.

Tampa HRHitting home runs has become a distressingly infrequent event as I’ve gotten older (I’m playing in a tourney for the 55-and-up crowd), and I like to memorialize it when it happens just in case it’s the last time.

So forgive me if I engage in Walter Mitty-style fantasizing. Maybe, just maybe, the Yankees will call with a contract offer.

Wait, who am I kidding?!?

That’s even less likely than Obamacare succeeding. Or politicians surrendering some of their power by enacting a flat tax.

I’m doomed to be a policy wonk for the rest of my life.

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Making America more like France will not help the poor in the USA!!!!

January 27, 2014 – 7:14 am

Making America more like France will not help the poor in the USA!!!!

Dan Mitchell Defending Honest Wealth from OWS Looters

If you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the “Iron Lady” explains how some – perhaps most – statists would be willing to reduce income for the poor if they could impose even greater damage on the rich.

This picture is another way of getting across the same point. It was sent to me by Richard Rahn (famous for the Rahn Curve), and it uses two pizzas to show how leftist policies would “solve” inequality.

Leftist Fairness

I like this analogy, and not just because I also used the pizza analogy to make the same argument in this TV interview.

The growing or shrinking pizza is useful because it helps to focus people on the importance of growth.

Nations that follow the right policy recipe can enjoy the kind of strong and sustained growth that enables huge increases in prosperity for all income classes. In other words, everyone can have a bigger slice if the pie is growing.

I even tried to educate a PBS audience that growth is better than redistribution if you really want to help the poor. Talk about Daniel in the Lion’s Den!

I don’t know if I persuaded anyone, but at least the facts are on my side. Consider, for instance, how the world’s two most laissez-faire jurisdictions – Hong Kong and Singapore – have overtaken the United States over the past 50-plus years.

That’s been great news for low-income and middle-income people, not just the rich.

So ask yourself whether you’d rather be a poor person in one of those jurisdiction or in France. The government in France has all sorts of programs to make your life easier, but you have very little hope of escaping a life of dependency.

And now ask yourself whether it’s good that Obama is doing his best to push America in that direction.

P.S. If you want another example of how long-run growth makes a big difference, check out this chart comparing Chile, Argentina, and Venezuela. Not only has Chile overtaken the other nation thanks to pro-market reforms, but the poverty rate has fallen dramatically.

P.P.S. Since this post shares a very good image about income inequality, let’s include a bonus picture on taxation.

It’s a helpful suggestion on how to make kids aware of the cost of big government.

Tax Lesson for Kids

Though let’s be sure to acknowledge that Obama is doing what he can to make kids more skeptical of class warfare.

P.P.P.S. On a separate topic, I’ve explained that the so-called “austerity” vs “growth” argument is grossly misguided because Keynesian spending isn’t pro-growth and also because it’s important to distinguish between good austerity and bad austerity.

Too many governments are choosing the wrong type of austerity, imposing destructive tax hikes on the private sector. What’s really needed in genuine spending restraint so that “austerity” is imposed on the public sector.

But some folks on the left say there’s been too much spending restraint in recent years.

So who’s right? Well, UBS has produced a report containing some very useful data.

Viewing the global economy as a single unit, we see a very  different picture to the post-crisis world of austerity – at least if “austerity” is taken to mean government spending cuts. The two largest components of global GDP, namely private consumption and fixed investment, both hit multi-year peaks in the first quarter of 2008. …Since the start of 2008, government consumption at the  global level has risen by 20% in real terms, whereas private consumption and fixed investment have risen just 8% and 5%, respectively. In other words, despite talk of austerity, government spending continues to run ahead of private-sector spending.

Hmmm…the burden of government has been growing faster than the private sector. That’s the opposite of what the Golden Rule calls for.

And not only has government been growing too fast in the past, it’s likely that fiscal policy will get even worse in the future.

Structurally, government debt, government spending, and the share of government within the economy must be sustainable. Government consumption’s share of global GDP has risen from 11% to 14% over the past 15 years. In 2013, it reached its highest level since 1980. At the same time, government debt-to-GDP ratios have hit record highs in many countries. In the long run, such elevated levels of expenditure (and corresponding levels of debt and deficit) are probably not sustainable, in particular, given other structural changes underway. For instance, demographic trends in many advanced economies pose challenges.

The moral of the story is that America and other nations should be restraining budgets, ideally by enacting the right kind of entitlement reform.

Though I’m worried that Obama is learning the wrong lesson from what’s happening in Europe.

Indeed, this Henry Payne cartoon shows what he has in mind. And if he succeeds, this satirical 2012 campaign slogan may become reality.

P.P.P.P.S. Here’s a final image that captures the essence of Washington.

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Obamacare’s sinking ship is sad to watch!!!

January 24, 2014 – 7:34 am

______

Oklahoma Doctors vs. Obamacare

Obamacare’s sinking ship is sad to watch!!!

The President’s main “accomplishment” has been such a disaster that I wonder whether it’s time to feel sorry for Obama.

And if you looked in the dictionary for a definition of Schadenfreude, you might find a picture of me reading a story exposing more evidence that Obamacare isn’t working.

Heck, I’ve even shared Hitler parody videos (two of them!) mocking the law.

But to paraphrase Mae West, there’s no such thing as too much of a good thing.

Today, we’re going to look at the opinions of two experts, both of whom expect further bad news for Obamacare.

Here’s some of what Michael Tanner, my Cato colleague, wrote for the New York Post.

…“the State of ObamaCare” is growing ever more troubled. For starters, it’s falling far short of the goal of universal coverage. …just 1.5 million have actually completed the ObamaCare checkout, including payment. Worse, surveys indicate that less than a third of those enrolling were previously uninsured. …Even using the most optimistic reading of these figures, fewer than 11 percent of uninsured Americans have gotten coverage because of the ObamaCare law; most likely, fewer. This is what we’re getting for the $2.7 trillion that ObamaCare will cost over the next 10 years? Plus, we should subtract the roughly 500,000 Americans who, by the White House’s own count, have lost insurance because of ObamaCare.

And Mike expects things will get worse over time.

…that’s just the tip of the iceberg, because those policy-killing rules will hit another part of the market over the course of this year — namely, the “small group” market, where employers now buy health policies that cover about 78 million Americans. Many of those with cancelled plans will ultimately end up with similar, if more expensive, employment-based policies, but some are likely to simply wind up uninsured. …Then there’s the bad news about who is enrolling in ObamaCare plans — or rather, who isn’t: not enough of the young and healthy folks that the program needs to overpay for insurance so as to offset the costs of covering older and sicker people. …Oh, and a Reuters survey finds that new enrollees are also less healthy than ObamaCare’s designers hoped, too. Humana, one of the nation’s largest insurers, reports that so far enrollment in its exchange-based plans has been far “more adverse than previously expected.”

Megan McArdle of Bloomberg is similarly unimpressed with how Obamacare has developed.

Enrollment is below expectations: According to the data we have so far, more than half of the much-touted Medicaid expansion came from people who were already eligible before the health-care law passed, and this weekend, the Wall Street Journal reported that the overwhelming majority of people buying insurance through the exchanges seem to be folks who already had insurance. Coverage is less generous than many people expected, with narrower provider networks and higher deductibles. The promised $2,500 that the average family was told they could save on premiums has predictably failed to materialize. And of course, we now know that if you like your doctor and plan, there is no reason to think you can keep them.

But it’s going to get worse, she writes.

The Barack Obama administration is in emergency mode, pasting over political problems with administrative fixes of dubious legality, just to ensure the law’s bare survival — which is now their incredibly low bar for “success.” Although the fixes may solve the short-term political problems, however, they destabilize the markets, which also need to work to ensure the law’s survival. The president is destroying his own law in order to save it.

The article has lots of detail, but here are a few highlights of the bad things that already have happened.

Obamacare’s exchange facility was conceived as a “three-legged stool”: guaranteed issue, community rating, mandate. …Take one away, and the whole thing is in danger of collapsing. Unfortunately, whenever someone has voiced discontent with the way things are going, the administration has taken a hacksaw to another leg. …some folks who had policies they liked before were being forced to drop them and buy new policies they didn’t like so much. That caused an outcry, followed by an emergency grandfathering rule. Other major emergency fixes include…A one-year delay of the employer mandate…Numerous extensions of enrollment and payment deadlines…Changes in the rules governing the “risk corridor” programs that cover excess losses at insurers.

And here are the bad things that Megan expects will happen in the future.

…the worst is yet to come. Here’s what’s ahead…2014: Small-business policy cancellations…Summer 2014: Insurers get a sizable chunk of money from the government to cover any excess losses. When the costs are published, this is going to be wildly unpopular…Fall 2014: New premiums are announced…2014 and onward: Medicare reimbursement cuts eat into hospital margins…Spring 2015: The Internal Revenue Service starts collecting individual mandate penalties…Spring 2015: The IRS demands that people whose income was higher than they projected pay back their excess subsidies…Spring 2015: Cuts to Medicare Advantage…Fall 2015: This is when expert Bob Laszewski says insurers will begin exiting the market if the exchange policies aren’t profitable…Fall 2017: Companies and unions start learning whether their plans will get hit by the “Cadillac tax,”…January 2018: The temporary risk-adjustment plans, which the administration is relying on to keep insurers in the marketplaces even if their customer pool is older and sicker than projected, run out…Fall 2018: Buyers find out that subsidy growth is capped for next year’s premiums…I expect that the administration is going to issue “temporary” administrative fixes for most of the law’s unpopular bits — just as it has so far. That’s not going to get any easier as midterms and then a presidential election creep closer.

Wow. If I was a Democrat politician, I would not be overly happy at that list – particularly since Obamacare already has caused several dozen involuntary retirements from Congress.

And if I was a partisan Republican, I would get down on my knees every day to give thanks because Chief Justice John Roberts was willing to disregard the Constitution to keep Obamacare alive.

But since I’m a humble policy wonk who simply wants to protect and restore economic liberty, I’m just glad that there’s growing recognition that Obamacare is a turkey that needs to be repealed. No wonder I’m getting more optimistic with each passing day.

Let’s close with a couple of new Obamacare cartoons.

Using an image that will cause many of us to wince, Glenn Foden manages to combine Obamacare and the NSA spying scandal.

Obamacare Cartoon Tampa 2

Hmmm…I think the images in this example of NSA humor is more pleasurable.

And here’s Henry Payne mixing Obamacare and movie awards.

Obamacare Cartoon Tampa 1

This post has focused on Obamacare’s failings, so let’s close with an acknowledgement that it’s hard to beat something with nothing.

That’s why reformers need to advocate the types of policies that would undo decades of intervention and re-introduce market forces to the healthcare system.

This video from Reason TV is  a great introduction to that topic.

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We got to cut the size of government and Obamacare is the best place to cut!!!!

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By Everette Hatcher III | Also posted in Cato Institute, Healthcare, spending out of control | Comments (0)

Open letter to President Obama (Part 504) (Get the big federal government off of our backs)

January 24, 2014 – 1:10 am

Open letter to President Obama (Part 504)

(Emailed to White House on 4-15-13.)

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

___________________

We need to let more freedom back in the USA and get the big federal government off of our backs.

Funding Government by the Minute

Published on Mar 28, 2012

At the rate the federal government spends, it runs out of money on July 31. What programs should be cut to balance the budget and fund the government for the remaining five months of the year? Cutting NASA might buy two days; cutting the Navy could buy fifteen. It seems that balancing the budget may require more than just cutting government programs. What should be done?

__________________

I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control.

It is sad to me that we can’t learn from history. So many european countries are so far down the socialist road that there is little economic growth and there is massive budget problems. Under Obama we are heading the same way as this cartoon demonstrates today on Dan Mitchell’s blog.

Too bad I didn’t have this Glenn Foden masterpiece when I did the political cartoonist contest last week.

I think it’s better than my previous favorite of his (about the “private sector doing fine”), and it’s thematically quite similar to the famous “European lemming” cartoon from Ramirez.

European Train Cartoon

One tiny correction, though. The Europeans aren’t socialists anymore. It’s more accurate to describe the policy in France, Italy, and elsewhere as cronyism, corporatism, or statism.

Though Thomas Sowell prefers to use an even harsher adjective when analyzing Obama’s approach.

What about providing some evidence that Obama’s making America more like Europe? Well, just check out the data from the latest Economic Freedom of the World annual report.

There are now six European nations that score above the United States, including two of my favorite places – Switzerland and Estonia!

It doesn’t justify his bad policies, but it’s worth noting that Obama’s merely continuing a bad trend that started under Bush.

 

______________________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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By Everette Hatcher III | Also posted in Cato Institute, President Obama | Comments (0)

Big Government cronyism lines the pockets of dishonest companies!!!!

January 22, 2014 – 7:18 am

 

“Is Capitalism “Pro-Business?”

Published on Aug 7, 2012

Find LearnLiberty on Facebook: http://on.fb.me/X9qijG

In this video, Professor Steve Horwitz advocates for free market economic policy. He refutes the often recited claim that “What is good for General Motors is good for America” by explaining that pro-business legislation encourages behavior that is not beneficial to society or the business itself. He suggests that, in a free market, factors such as profit and competition encourage behavior that ultimately benefits society. Professor Horwitz illustrates that pro-business legislation restricts progress and therefore caters to the interests of industry rather than to consumers, whereas “supporters of free markets are ultimately pro-human and pro-people because it is through markets that we get the most innovation and we get the most goods and the cheapest prices.”

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Big Government cronyism lines the pockets of dishonest companies!!!!

A bunch of well-connected rich people and government officials are descending upon Switzerland for the annual World Economic Forum meeting in Davos.

This upsets many people, and perhaps with some justification. After all, bad things often happen when big business and big government intersect.

But some folks reflexively think that wealth is bad and they would like us to believe that the economy is a fixed pie, meaning that the rich have more money because the poor have less money.

If you think I’m exaggerating, check out a new report from Oxfam, a UK-based group that was created to alleviate poverty but has largely morphed into a left-wing pressure group.

The folks at Oxfam complain about the supposed “capture of opportunities by the rich at the expense of the poor and middle classes” and that “tax rates for the richest have fallen in 29 of the 30 countries.”

Here are some excerpts from a report in the EU Observer.

As the world’s richest and most powerful men and women prepare to meet in the Swiss resort of Davos for the annual World Economic Forum on Wednesday (22 January), the British development charity, Oxfam, has issued a new report on global inequality. According to its findings, the wealth of the world’s 85 richest people – €81.2 trillion – amounts to that of the poorest half of the world population, or 3.5 billion people. …”In Europe, austerity has been imposed on the poor and middle classes under huge pressure from financial markets whose wealthy investors have benefited from state bailouts of financial institutions,” the charity said. Financial deregulation in the US has contributed to the situation, in which the richest one percent of the population has more money than ever since 1933.  …The charity said Davos participants should reverse the trend and pledge to support higher taxes for the rich, while refraining from using their wealth to seek political favours.

There are several parts of this excerpt that deserve attention, including passages that are correct (such as bailouts giving undeserved money to the rich) and passages that are nonsensical (the financial crisis was caused by intervention, not deregulation).

But I want to focus solely on the inequality issue. Let’s assume Oxfam is right and that the world’s 85 richest people have $81.2 trillion of wealth. The group obviously wants us to think this accumulation of wealth is bad and that it somehow comes at the expense of the rest of us.

Tim Carney of the Washington Examiner hits the nail on the head, explaining that there’s a big difference between honest wealth and riches obtained through government coercion.

…is it a bad thing for a country to have some really rich people? Again, it depends on how they got rich. Sutirtha Bagchi of the University of Michigan’s business school and Jan Svejnar of Columbia’s School of International and Public Affairs studied how inequality correlates with economic growth. In general, more inequality meant slower growth, and less inequality meant faster growth. But in many countries, over various time periods, growing inequality had no effect on economic growth. The new study suggests that an increase in inequality hurt the economy when the rich were getting rich through political connections. That is, inequality hurts the economy when “a large share of the national wealth is held by a small number of politically connected families,” as the authors put it. …Bagchi and Svenjar took pains to classify political billionaires as narrowly as possible. …The political billionaires were only people who “would not have become a billionaire in the absence of political connections that resulted in favoritism and/or explicit government support.”

The oft-missed lesson here is that undeserving wealth generally is obtained because of big government.

Which reminds me of a very astute observation by a former Cato colleague, who wrote that, “…the more power the government has to pick winners and losers, the more power rich people will have relative to poor people.”

Carney continues, pointing out that wealth obtained through markets is good. Such success creates a bigger pie and helps boost living standards for everyone.

But wealth achieved via government is cronyism, and that contributes to economic stagnation.

When a country’s wealthiest got wealthy through market means, the resulting inequality has no negative effect on economic growth. This jibes with what we know about free markets. If people can get rich by providing valuable things at good prices, then society will get more valuable things at good prices—and people across the income spectrum benefit. But if people get rich by pocketing subsidies and using the state to crush competitors, then they gained their wealth at the expense of everyone else. Bill Gates became a billionaire by making and selling something that makes regular people more productive and more connected. Buffett got rich largely by providing capital to underfunded but well-run businesses. If Bagchi’s and Svejnar’s findings are correct, then the bottom line is this: Inequality itself doesn’t hurt the economy. Cronyism hurts the economy.

I fully agree with Tim’s analysis, though I would have drawn a distinction between the younger Warren Buffett, who was a savvy investor and the older Buffett, who has climbed into bed with the political elite.

The bottom line is that the poor aren’t poor because of honest rich people. The poor are suffering because of big government, including the cronyism that lines the pockets of dishonest companies and individuals that feed at the public trough.

Unfortunately, many insider leftists are perfectly content with those policies and they use inequality to distract voters from the real problem.

There are honest leftists, of course, and they presumably would be outraged by the sleaze in national capitals. Their problem is that they genuinely think the economic is fixed pie. Or they think that inequality is such a bad thing that they would be willing to reduce incomes for the poor if it meant the rich suffered even more.

If you don’t believe me, watch this marvelous video of Margaret Thatcher debunking the left.

And my old grad school colleague Steve Horwitz also has some very sage observations on income inequality and class warfare.

P.S. In its report on inequality, Oxfam also went after tax havens and said more revenue for government would help reduce poverty.

Oxfam also estimated that €15.5 trillion of the wealth is hidden from the taxman in offshore accounts, at a time when governments are cutting public spending. …tax avoidance by EU and US corporations in Africa is depriving its governments from resources which could be use to fight poverty.

I wrote a study years ago exposing Oxfam’s sloppy methodology on tax competition issues. No wonder they’ve been labeled as being part of the “tax taliban.”

But what really irks me about that passage is the assumption that bigger government reduces poverty. That’s nonsense. The data shows that growth is the best way of helping the poor.

Christie JokeP.S. I wrote yesterday about Chris Christie’s problems in New Jersey. I said his real challenge was the need to reduce the burden of government, not the bridge scandal.

But I’m a sucker for good political humor, so enjoy this image that appeared in my inbox.

P.P.S. Since Oxfam criticized tax havens, I can’t resist calling your attention to my video tutorial on tax competition and tax haven.

Simply stated, we need some external check on the greed of the political class.

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By Everette Hatcher III | Also posted in Cato Institute, spending out of control | Comments (0)

Open letter to President Obama (Part 502) (Revenge of the Laffer Curve…Again and Again and Again)

January 22, 2014 – 1:59 am

Open letter to President Obama (Part 502)

(Emailed to White House on 4-15-13.)

President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

___________________

You have raised taxes several times but have you calculated the fact that revenues may go down?

The Laffer Curve, Part I: Understanding the Theory

Uploaded on Jan 28, 2008

The Laffer Curve charts a relationship between tax rates and tax revenue. While the theory behind the Laffer Curve is widely accepted, the concept has become very controversial because politicians on both sides of the debate exaggerate. This video shows the middle ground between those who claim “all tax cuts pay for themselves” and those who claim tax policy has no impact on economic performance. This video, focusing on the theory of the Laffer Curve, is Part I of a three-part series. Part II reviews evidence of Laffer-Curve responses. Part III discusses how the revenue-estimating process in Washington can be improved. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org

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I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. Today’s cartoon deals with the Laffer curve.

If I live to be 100 years old, I suspect I’ll still be futilely trying to educate politicians that there’s not a simplistic linear relationship between tax rates and tax revenue.

You can’t double tax rates, for instance, and expect to double tax revenue. Simply stated, there’s another variable – called taxable income – that needs to be added to the equation. This simple insight is what gives us the Laffer Curve.

This is common sense in the business community. No restaurant owner would ever be foolish enough to think that revenues will double if all prices increase by 100 percent. People in the real world know that this would mean lower sales.

At best, revenues will rise by much less than 100 percent in that scenario. And if sales drop by enough, revenues may actually fall.

Perhaps because so few of them have business experience, it seems that politicians have a hard time grasping this simple concept.

The latest examples come from Europe, where the never-ending greed for more revenue has resulted in the imposition of financial transaction taxes.

So how’s that working out? Are politicians collecting the revenue they expected?

Hardly. Here are some of the details from a City A.M. column.

…taxes on financial transactions across Europe have devastated market activity and failed to raise as much as politicians hoped, according to new figures out yesterday.

The article cites three powerful examples, starting with Hungary.

Hungary implemented a 0.1 per cent tax at the start of the year. But it raised less than half the revenue the state had hoped for, bringing in 13bn Hungarian Forints (£36m) in January.

Wow, less than 50 percent of the revenue that politicians were expecting. But the politicians probably don’t care about the collateral damage they’re imposing on the economy because they’ll get to buy votes with another 13 billion Forints (about $55 million).

Popeye Laffer CurveNow let’s see how the French are doing.

France forged ahead on its own, introducing a 0.2 per cent tax on sales of shares of major firms. But that only raised €200m (£169.4m) from August to November, well below to €530m expected.

Gee, what a shame, the politicians in Paris are only getting about one-third as much money as they were expecting. That’s even worse than Hungary.

But they’ll surely squander that bit of cash as fast as possible.

Our last example comes from Italy. There are no revenue numbers yet, but the decline in financial activity suggests this tax also will be a flop.

And Italy launched its FTT this month. Figures from TMF Group suggest it has cut trading volumes by 38 per cent already

Though politicians may decide it’s a success since they may get more than 50 percent of what they were originally estimating.

That kind of forecasting error would get somebody fired at any private business, but being a politician means never having to say you’re sorry.

And it certainly never means learning from mistakes. The evidence on the Laffer Curve is ubiquitous, with powerful examples in Ireland, the United Kingdom, Italy, France, Spain, as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New York.

P.S. Even President Obama has sort of acknowledged the supply-side principles that are the basis of the Laffer Curve.

P.P.S. Remember that the goal of good tax policy is NOT to maximize revenue.

P.P.P.S. I warned the European Union’s Taxation Commissioner about the dangers of a tax on financial transactions last year. Needless to say, my sage counsel appears to have been ignored.

 

______________________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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By Everette Hatcher III | Also posted in Cato Institute, President Obama | Comments (0)