Here's an interesting development. Some of you may have heard this news already.
[ https://thehill.com/homenews/administration/411828-us-announces-intent-to-withdraw-from-international-postal-rate-system ]
I learned about the "Universal Postal Union" while reading retrospective pieces about the demise of Radio Shack. One of the reasons they went down is because it's cheaper to ship those yummy little piecesparts from China than it is to ship domestically within the US. This is because the UPU still considers China a third-world nation, and the US subsidizes the shipping costs of incoming parcels.
This, of course, is why Amazon and others are able to abuse the system. I wondered how long it would take for the "America First" administration to take notice, and make efforts to fix the problem. We can leave the politics out of it by avoiding discussion of whether the approach being taken is correct. But it does seem to be pretty obvious that China no longer has any need for this kind of economic advantage at our expense, so I'm happy to hear that it's being addressed.
Yes, that $0.99 widget will now cost $1.49. Who cares.
Clive will care, all his stuff comes from China.
Speaking of economics...
Arthur Laffer has received the Presidential Medal of Freedom.
This, of course, has upset critics of both Laffer himself and also the President.
No big surprise there, but it's probably a force-multiplier in both directions.
Laffer is known for pointing out that revenue relative to GDP remains fairly constant, regardless of where the tax rates are actually set, therefore tax rates should be set to maximize GDP and therefore tax revenue. His theory places that maximum revenue point towards the lower end of the tax rate scale.
Don't bother reading the Wikipedia article on the Laffer Curve. It reads as if it were written by Paul Krugman, and basically concludes that we should all be taxed at 70%.
Speaking of Laffer, our crappy excuse for a president claimed that he studied the Laffer Curve in college, which was like Wharton class of '68? Laffer famously drew the eponymous Curve on a napkin in like '73 or '74. You figure out the implications for yourself.
You're probably thinking of President Trump, and if so, you're correct. He seems to have misremembered when he learned Laffer theory. Nevertheless, he has put Laffer economics into practice, and the thriving economy suggests that it is working. The market is way up, employment is way up, and the growth of the national debt has slowed way down.
It's hard to find good reads on Laffer economics. Wikipedophilia describes it wrong, and the fake news describe it as "debunked". Tom McClellan pointed out that whenever total federal tax receipts exceed 18 percent of GDP, it inevitably leads to a recession. Laffer theorized that tax rates when set too high, harm the economy, which seems pretty obvious to me. I seem to recall that he cited that same 18 percent as a sort of stable point to which a healthy economy gravitates -- it sort of "snaps" to that percentage within a wide range of tax rates. In other words, low tax rates and a thriving economy, vs. high tax rates and an anemic economy, either way it ends up around 18 percent.
Hmmm... maybe I am wrong, but the actuall Laffer hipothesis is that when you are rising taxes, there is a point after which you make less tax money despite the fact you are charging bigger and bigger ammounts of protection rates to your subjects. Usually the Laffer effect is used to declare that you should not rise the taxes after the sweet spot because then you are not maximizing gov revenue.
It doesn't imply that the people is better or worse with more or less taxes. I have a strong opinion on that, but it is not born from Laffer effect theories. Actually, I think that the government managing big ammounts of money is not necessarily good because then it has more chances of using tax dollar against the population, so the idea of maximizing government income does not appeal to me.
An interesting consideration is that the fact business get officially shutdown because they cannot afford taxes does not necessarily mean they are getting shutdown in practice. And by this I mean, if the government sets an income tax of 90% I will just move more of my business to the dark market, the government will make less money, and I will perform about the same economic activities. I think over-regulation is oftentimes very effective at self destructing. I have been moving more and more of my moneymaking out of my country and out of the hands of tax collectors with the years due to over regulation and I think I am actually making more money because of the laws trying me to make less.
I used to carry a small knife on me because big knives were illegal to carry. Then they made small knives illegal too, so now I carry something way less PC correct than a small pocket knife. If the penaulty for carrying a bazooka is the same as the one for carrying a kubotan then you are gonna carry the bazooka. As Churchill said: When you make 10 000 regulations, you destroy every respect for the law.
Thu Aug 15 2019 13:55:52 EDT from IGnatius T FoobarLaffer means whatever you want it to mean. That seems to be the only consensus.
I think the Economist forgot to mention the usual Joseph and Pharaoh analogy. Too bad.
"Beating the market" sets the bar pretty low, actually. Good investments have to earn well, of course, but it's equally important to have low volatility.
Otherwise we'd all just invest in index funds and let our portfolios run on autopilot.
But if we're drunk on burgundy wine then maybe we don't care so much how our investments are doing.
But if we're drunk on burgundy wine then maybe we don't care so much
how our investments are doing.
I think you're not supposed to drink your investment. I mean, so I've been told. Might be why aahz ain't paid
We'll have to bring over a bottle of our own to sample. (* I'm dangerous if you let me finish it by myself.)