July 29, 2010; 9:54am ET
SV: Professor thanks for coming back to us.
PM: Nice to be with you.
SV: Now sir, I know that you want to keep all of the Bush tax cuts in place. Right? You want to keep ‘em. Make your case for that will you?
PM: This is a terrible time to increase taxes in the economy, the recovery is faltering, you know we talk about the rich, that includes a lot of small businesses, for example the luncheonette underneath your studio, that family, maybe two or three people working together have got a [IRS form] Schedule C, it generates income of more than two hundred and fifty thousand dollars. There’s one trillion dollars worth of taxable income like that from small businesses that this man is going to hike taxes on. And probably the problem is not taxes, it’s spending. This man [President Obama] spends too much! Let me tell you about that… the year before…
SV: Well hold on, hold on a second, I’m sorry professor but look, over the past ten days we’ve interviewed three prominent academics, professors and lecturers from Harvard, UCLA, and Bard College. Each and every one of them has said “We must put up taxes on the rich because we’ve got to cut the deficit.” Each and every one of them has said “We must spend another trillion dollars now to get the economy going.” You’re an academic, what do you say, now give me your point on spending. They want to spend. I guess you don’t.
PM: Well, I don’t think we should spend any more. Before the great recession in 2007, the deficit was one hundred and forty billion dollars. Our president is projecting, after the recession is over and the economy is growing at 4% per year, that the deficit will be one point four trillion dollars! What happened! The answer is: Barack Obama made a lot of spending, excluding the health care legislation, that was supposed to be stimulus, permanent. Government spending in 2012 and 2013 will be 25% of GDP according to the president’s estimates. When George Bush was president, it was 20% of GDP. He’s hiked the chunk that they want to take from you, and I don’t know what we’re getting for it. Can you see any appreciable improvement in the services your federal government provides you?
SV: I guess their argument is, and I’ve heard this argument, that had we not spent all that money then things would be a whole lot worse. What do you make of that argument?
PM: Well, the [idea] with stimulus spending, and what Barack Obama promised, something he’s always capable of walking away [from], is that it would be temporary. But he’s built these spending increases into the budget permanently, like for example his electric vehicle program which is going no place. The bottom line is, he’s built out the frontiers of government dramatically, and after the election’s over it’s not going to be just the rich. He cannot finance a government that is 25% larger as a share of GDP without putting terrible burdens on the middle class. You watch, this is the tip of the iceberg [not extending all the Bush Tax cuts], after this, it’s going to be a value added tax.
SV: Okay, oh, huh, huh... I hate to leave it there…
PM: Ah hah…
SV: But we’d better leave it right there. Professor Peter Morici, thanks for joining us again sir, always appreciated. Thank you.
PM: Take care, all the best.
Thursday, July 29, 2010
Monday, July 26, 2010
The Missing Voice in the Debate over Taxes!
I keep hearing the debate over “extending the Bush tax cuts” (or not) framed in terms of only these two sides:
I certainly agree with extending the Bush tax cuts. The single most important business sector we need to cultivate for the health of the economy is startups and small businesses, especially those in the $250k to $2.5M range. This is the incubator for the innovation that has always been America’s strength.
The missing voice in this debate is a call to SHRINK THE SIZE AND SCOPE OF GOVERNMENT! This is clearly a core issue driving the Tea Party movement. Indeed, the very invocation of imagery from the original Boston Tea Party era is borne of a desire to move back in the direction of our original constitutionally limited republic. The founders never intended the vast expansion of federal government that we see today. One can only imagine the horror of our founders if they could have seen what would become of the limits to power and scope they worked so hard to craft. This is the over-arching theme that animates every Tea Party event:
I cannot remember when I last heard a single interviewer expand the discussion about tax cuts to include corresponding spending cuts when the Left tries to raise the spurious bogey man of deficits; you never hear the word deficits cross their lips when the Left is voting to add $Ts in new legislation.
Cut spending... cut spending... cut spending... Are you listening inside the beltway?
Left: "If Republicans are serious about deficit control they have to agree to let the Bush tax cuts expire for 'the wealthiest Americans.'"My frustration is that no one is expanding the discussion beyond these narrow parameters. These two positions speak past one another, neither being responsive to the other. This is an ideal opportunity for an interviewer to guide and expand the discussion.
Right: "In the midst of a serious recession, it would be irresponsible to let the Bush tax cuts expire, raising taxes on small businesses where most jobs come from."
I certainly agree with extending the Bush tax cuts. The single most important business sector we need to cultivate for the health of the economy is startups and small businesses, especially those in the $250k to $2.5M range. This is the incubator for the innovation that has always been America’s strength.
The missing voice in this debate is a call to SHRINK THE SIZE AND SCOPE OF GOVERNMENT! This is clearly a core issue driving the Tea Party movement. Indeed, the very invocation of imagery from the original Boston Tea Party era is borne of a desire to move back in the direction of our original constitutionally limited republic. The founders never intended the vast expansion of federal government that we see today. One can only imagine the horror of our founders if they could have seen what would become of the limits to power and scope they worked so hard to craft. This is the over-arching theme that animates every Tea Party event:
“Cut Spending, Cut Taxes, and reduce the Size and Scope of government!”There is a voting majority today that is long past the notion that “entitlement spending” is some sort of untouchable “third rail” of government spending. We are anxious to have a debate with EVERYTHING on the table. The way to frame this is to take the original constitutional limits as the lower limit, and the present state as the upper limit, and work for something somewhere between these two limits.
I cannot remember when I last heard a single interviewer expand the discussion about tax cuts to include corresponding spending cuts when the Left tries to raise the spurious bogey man of deficits; you never hear the word deficits cross their lips when the Left is voting to add $Ts in new legislation.
Cut spending... cut spending... cut spending... Are you listening inside the beltway?
CUT SPENDING!!!
Saturday, July 24, 2010
Twitter Archive
What does the left believe rich people do with their money that doesn't help the economy? #econ #hhrs #tcot #teaparty #tax
They advocate "social justice," "minimum wage," and "universal health care." Who are they? http://bit.ly/9czUIe #hhrs #tcot #teaparty #econ
Everything a wealthy person does with income creates economic expansion, compared to horded cash. #hhrs #tcot #teaparty #econ #tax
The poor keep a larger % of their income in cash than the wealthy. The wealthy use banks, invest, and spend. #tcot #teaparty #hhrs #econ
RT @gscottoliver: Wait: "left think"? You know better than that! // Okay, perhaps "feel" would be a better word there.
What does the left think rich people do with their money that doesn't help the economy? #econ #hhrs #tcot #teaparty
RT @DebbieSchlussel #Christian May Get Life in US Prison 4 Self-Defense from #Muslim Mob http://is.gd/dCkNj #tcot #jcot #islam #immigration
RT @ORlibertygal Travesty! You can thank the democrat elitists who won't allow school choice! http://shar.es/mVMo0 #teaparty #hhrs #tcot
RT @Heritage The next Govt takeover? National #education standards. #edreform http://herit.ag/bth #tcot #hhrs #teaparty #econ #killUSDE #gop
And this is precisely the goal of the Fabian, revolution by slippery slope. #hhrs #tcot #teaparty
This leaves some reluctant to call the progressives socialist, because each step seems less than total capitulation. #tcot #teaparty #hhrs
The progressives are Fabian Socialists. They believe in gradual socialist change rather than revolutionary change #tcot #teaparty #hhrs #gop
Democratic socialism was not created for the elevation of individual liberty, but for it's enslavement to the group. #hhrs #tcot #teaparty
Limited and decentralized govt, free trade & mkts, maximized individual liberty, these are the conditions for liberty. #hhrs #tcot #teaparty
He explains that the left appropriated the label in the supreme, if unintended compliment. #hhrs #tcot #teaparty #ClassicalLiberal #econ
On page 5 of Milton Friedman's "Capitalism and Freedom" he explains why "liberal" is the wrong label for the left. #tcot #hhrs #teaparty
RT @ORlibertygal: @Huffman2010 Go Jim! http://bit.ly/bLLJ3R #orcot #tcot #teaparty #conus #founders #econ
@tamij There is now, and ever shall be, only one "Tribble Princess" - The inimitable bright and shining @Tamij #hhrs
RT @BrendaHilliard2: If you put the fed govt in charge of the Sahara, in 5 yrs there'd be a shortage of sand." ~M. Friedman #tcot #econ #gop
RT @Luigi1492: In the spirit of Hayek, the rd to fin ruin is paved by grand govt intent w/ unintended long term consequences #econ #teaparty
RT @ORlibertygal @Theblacksphere "loved the book" http://bit.ly/ay06tT #orcot // It's on my list.
#FF @Theblacksphere @ORlibertygal @LizzieViolet @mkhammer @RedState @Lileks @exposeliberals @VictoriaTaft @hughhewittblog #tcot #teaparty
#Fauxbama "Now European leaders don't even like me." http://bit.ly/bokX2i #hhrs #teaparty #tcot
#Fauxbama "I just wanted us to be like Eur, now Eur isn't even like Eur. It's like trying to do Woodstock 3 days & finding the trash pile."
#fauxbama "I told you I would 'restore' America to its rightful place in the world, & we're more like Jimmy Carter's USA everyday" #teaparty
Keith Olberman loses ownership of his own domain name! Oh darn! Three Cheers for Tucker Carlson! http://bit.ly/alMHo4 #hhrs #tcot #teaparty
#GOP needs to run on 4 R's: Remove Dem's, Repeal their bills, Replace w/ mkt reforms, Restore #conus ltd Govt! #Nov! #tcot #teaparty #econ
#Fauxbama Disney movie title: "Honey I shrunk 'The People'!" #tcot #teaparty #gop #hhrs #conus
#Fauxbama "Oh well, those 'small businesses' only create 'small jobs' anyway. We're focused on growing BIG BUSINESS, and BIG GOVERNMENT!"
#Fauxbama: "Business thrives on uncertainty! ... or was it the other way 'round? Whichever..., but.., We're Headed in the right direction!
RT @johnboehner Thomas Sowell: "Obama succeeded only in creating uncertainty" http://bit.ly/b1VT0o #econ #business #teaparty #tcot #hhrs
Ann Coulter with some clear thinking about the Constitution and the Supreme Court. http://bit.ly/abUwEO #tcot #teaparty #hhrs #conus #scotus
Frank-n-Dodd Financial bill gives unions trojan horse into boards of all publicly traded co's. http://politi.co/blv0IW #business #econ #tcot
#Gipper: Recession is your neighbor losing his job, Depression is your job lost, Recovery is Reid/Pelosi/Obama lose their jobs! #tcot #hhrs
UKs Daniel Hannan, the best reason to allow non-citizens to run for USA presidenthttp://bit.ly/bVEZUg #hhrs #tcot #teaparty #econ
Let me get this str8, exactly which Islamic nation does Obama think needs NASA's help w/ ICBM capability? #hhrs #teaparty #tcot #nov #israel
RT @foundingfather: There is nothing so likely to produce peace as to be well prepared to meet an enemy. #tcot #teaparty #hhrs #mil
Thomas Sowell, MUST READ! #Econ #Stimulus #Inflation Velocity of money #liquidity #Gold http://t.co/UTDuAt8 #tcot #hhrs #teaparty #business
RT @redostoneage President of New Black Panther Party Admits Plan to Intimidate Voters http://bit.ly/93uODR #teaparty #hhrs #tcot #gop #nov!
Hayek et al had it exactly right, and Keynes quite wrong. Original 1932 op ed letters http://bit.ly/cbFkJK #econ #teaparty #tcot #nov! #hhrs
RT @redostoneage http://bit.ly/dpj2jR Majority of Likely Voters: 'Socialist' Accurately Describes Obama #teaparty #hhrs #tcot #econ #nov!
I do not believe there has ever been an administration more disconnected from economic reality. #econ #teaparty #business #tcot #nov! #hhrs
Rahm Emanuel: "Biz ldrs should be grateful for Obama's support of biz." !? http://bit.ly/9BeJlc #econ #teaparty #business #tcot #nov! #hhrs
FBN Video report about new 1099 tax regs for ALL PURCHASES over $600! http://bit.ly/9XsCrg #econ #teaparty #business #tcot #gop #nov! #hhrs
RT @fleckman: Prez here: Remember I sd I'm 4 small business? Yeah, I'm a liar. http://bit.ly/dphucl HT @FVHayek #tcot #p2 // Yes indeed!
New 1099 regs for purchases over $600 will be a reporting nightmare, costs will be inflationary! #econ #business #tcot #gop #nov! #hhrs
New IRS regs will require 1099 filing not only for services, but ALL PURCHASES over $600! Nightmare for SB! #business #econ #tcot #gop #irs
Full text story FBN's Elizabeth MacDonald: Deutsche Bank internal report on the Frank-n-Dodd bill: http://bit.ly/8XFNKK #econ #tcot #hhrs
This steel plant has created more "clean energy" than all the solar panels ever deployed. http://bit.ly/97ZcbU #econ #tcot #gop #teaparty
"Tell the federal govt to GO AND SIT IN A CORNER AND LEAVE THE ECONOMY ALONE!" - John Bolton on Varney & Co., FBN #tcot #teaparty #econ #gop
Very interesting video "10 ways to be your own boss" - Fred Wilson http://bit.ly/bSFCP9 #entrepreneur #unemployed #tcot #hhrs #econ #create
Video: "Deutsche Bank Rips Into the Frank-n-Dodd "Financial Reform"" [sic] http://bit.ly/ak89wi #hhrs #tcot #gop #teaparty #econ
"Tell the federal govt to GO AND SIT IN A CORNER AND LEAVE THE ECONOMY ALONE!" - John Bolton on Varney & Co., FBN #tcot #teaparty #econ #gop
Full text story FBN's Elizabeth MacDonald: Deutsche Bank internal report on the Frank-n-Dodd bill: http://bit.ly/8XFNKK #econ #tcot #hhrs
Thanks to Elizabeth MacDonald for the Deutsche Bank "Financial Reform" story: http://bit.ly/ak89wi // #hhrs #tcot #gop #teaparty #hhrs
Deutsche Bank Rips Into the Frank-n-Dodd "Financial Reform" [sic] http://bit.ly/ak89wi // A DISASTER!!! #hhrs #tcot #gop #teaparty #hhrs
They advocate "social justice," "minimum wage," and "universal health care." Who are they? http://bit.ly/9czUIe #hhrs #tcot #teaparty #econ
Everything a wealthy person does with income creates economic expansion, compared to horded cash. #hhrs #tcot #teaparty #econ #tax
The poor keep a larger % of their income in cash than the wealthy. The wealthy use banks, invest, and spend. #tcot #teaparty #hhrs #econ
RT @gscottoliver: Wait: "left think"? You know better than that! // Okay, perhaps "feel" would be a better word there.
What does the left think rich people do with their money that doesn't help the economy? #econ #hhrs #tcot #teaparty
RT @DebbieSchlussel #Christian May Get Life in US Prison 4 Self-Defense from #Muslim Mob http://is.gd/dCkNj #tcot #jcot #islam #immigration
RT @ORlibertygal Travesty! You can thank the democrat elitists who won't allow school choice! http://shar.es/mVMo0 #teaparty #hhrs #tcot
RT @Heritage The next Govt takeover? National #education standards. #edreform http://herit.ag/bth #tcot #hhrs #teaparty #econ #killUSDE #gop
And this is precisely the goal of the Fabian, revolution by slippery slope. #hhrs #tcot #teaparty
This leaves some reluctant to call the progressives socialist, because each step seems less than total capitulation. #tcot #teaparty #hhrs
The progressives are Fabian Socialists. They believe in gradual socialist change rather than revolutionary change #tcot #teaparty #hhrs #gop
Democratic socialism was not created for the elevation of individual liberty, but for it's enslavement to the group. #hhrs #tcot #teaparty
Limited and decentralized govt, free trade & mkts, maximized individual liberty, these are the conditions for liberty. #hhrs #tcot #teaparty
He explains that the left appropriated the label in the supreme, if unintended compliment. #hhrs #tcot #teaparty #ClassicalLiberal #econ
On page 5 of Milton Friedman's "Capitalism and Freedom" he explains why "liberal" is the wrong label for the left. #tcot #hhrs #teaparty
RT @ORlibertygal: @Huffman2010 Go Jim! http://bit.ly/bLLJ3R #orcot #tcot #teaparty #conus #founders #econ
@tamij There is now, and ever shall be, only one "Tribble Princess" - The inimitable bright and shining @Tamij #hhrs
RT @BrendaHilliard2: If you put the fed govt in charge of the Sahara, in 5 yrs there'd be a shortage of sand." ~M. Friedman #tcot #econ #gop
RT @Luigi1492: In the spirit of Hayek, the rd to fin ruin is paved by grand govt intent w/ unintended long term consequences #econ #teaparty
RT @ORlibertygal @Theblacksphere "loved the book" http://bit.ly/ay06tT #orcot // It's on my list.
#FF @Theblacksphere @ORlibertygal @LizzieViolet @mkhammer @RedState @Lileks @exposeliberals @VictoriaTaft @hughhewittblog #tcot #teaparty
#Fauxbama "Now European leaders don't even like me." http://bit.ly/bokX2i #hhrs #teaparty #tcot
#Fauxbama "I just wanted us to be like Eur, now Eur isn't even like Eur. It's like trying to do Woodstock 3 days & finding the trash pile."
#fauxbama "I told you I would 'restore' America to its rightful place in the world, & we're more like Jimmy Carter's USA everyday" #teaparty
Keith Olberman loses ownership of his own domain name! Oh darn! Three Cheers for Tucker Carlson! http://bit.ly/alMHo4 #hhrs #tcot #teaparty
#GOP needs to run on 4 R's: Remove Dem's, Repeal their bills, Replace w/ mkt reforms, Restore #conus ltd Govt! #Nov! #tcot #teaparty #econ
#Fauxbama Disney movie title: "Honey I shrunk 'The People'!" #tcot #teaparty #gop #hhrs #conus
#Fauxbama "Oh well, those 'small businesses' only create 'small jobs' anyway. We're focused on growing BIG BUSINESS, and BIG GOVERNMENT!"
#Fauxbama: "Business thrives on uncertainty! ... or was it the other way 'round? Whichever..., but.., We're Headed in the right direction!
RT @johnboehner Thomas Sowell: "Obama succeeded only in creating uncertainty" http://bit.ly/b1VT0o #econ #business #teaparty #tcot #hhrs
Ann Coulter with some clear thinking about the Constitution and the Supreme Court. http://bit.ly/abUwEO #tcot #teaparty #hhrs #conus #scotus
Frank-n-Dodd Financial bill gives unions trojan horse into boards of all publicly traded co's. http://politi.co/blv0IW #business #econ #tcot
#Gipper: Recession is your neighbor losing his job, Depression is your job lost, Recovery is Reid/Pelosi/Obama lose their jobs! #tcot #hhrs
UKs Daniel Hannan, the best reason to allow non-citizens to run for USA president
Let me get this str8, exactly which Islamic nation does Obama think needs NASA's help w/ ICBM capability? #hhrs #teaparty #tcot #nov #israel
RT @foundingfather: There is nothing so likely to produce peace as to be well prepared to meet an enemy. #tcot #teaparty #hhrs #mil
Thomas Sowell, MUST READ! #Econ #Stimulus #Inflation Velocity of money #liquidity #Gold http://t.co/UTDuAt8 #tcot #hhrs #teaparty #business
RT @redostoneage President of New Black Panther Party Admits Plan to Intimidate Voters http://bit.ly/93uODR #teaparty #hhrs #tcot #gop #nov!
Hayek et al had it exactly right, and Keynes quite wrong. Original 1932 op ed letters http://bit.ly/cbFkJK #econ #teaparty #tcot #nov! #hhrs
RT @redostoneage http://bit.ly/dpj2jR Majority of Likely Voters: 'Socialist' Accurately Describes Obama #teaparty #hhrs #tcot #econ #nov!
I do not believe there has ever been an administration more disconnected from economic reality. #econ #teaparty #business #tcot #nov! #hhrs
Rahm Emanuel: "Biz ldrs should be grateful for Obama's support of biz." !? http://bit.ly/9BeJlc #econ #teaparty #business #tcot #nov! #hhrs
FBN Video report about new 1099 tax regs for ALL PURCHASES over $600! http://bit.ly/9XsCrg #econ #teaparty #business #tcot #gop #nov! #hhrs
RT @fleckman: Prez here: Remember I sd I'm 4 small business? Yeah, I'm a liar. http://bit.ly/dphucl HT @FVHayek #tcot #p2 // Yes indeed!
New 1099 regs for purchases over $600 will be a reporting nightmare, costs will be inflationary! #econ #business #tcot #gop #nov! #hhrs
New IRS regs will require 1099 filing not only for services, but ALL PURCHASES over $600! Nightmare for SB! #business #econ #tcot #gop #irs
Full text story FBN's Elizabeth MacDonald: Deutsche Bank internal report on the Frank-n-Dodd bill: http://bit.ly/8XFNKK #econ #tcot #hhrs
This steel plant has created more "clean energy" than all the solar panels ever deployed. http://bit.ly/97ZcbU #econ #tcot #gop #teaparty
"Tell the federal govt to GO AND SIT IN A CORNER AND LEAVE THE ECONOMY ALONE!" - John Bolton on Varney & Co., FBN #tcot #teaparty #econ #gop
Very interesting video "10 ways to be your own boss" - Fred Wilson http://bit.ly/bSFCP9 #entrepreneur #unemployed #tcot #hhrs #econ #create
Video: "Deutsche Bank Rips Into the Frank-n-Dodd "Financial Reform"" [sic] http://bit.ly/ak89wi #hhrs #tcot #gop #teaparty #econ
"Tell the federal govt to GO AND SIT IN A CORNER AND LEAVE THE ECONOMY ALONE!" - John Bolton on Varney & Co., FBN #tcot #teaparty #econ #gop
Full text story FBN's Elizabeth MacDonald: Deutsche Bank internal report on the Frank-n-Dodd bill: http://bit.ly/8XFNKK #econ #tcot #hhrs
Thanks to Elizabeth MacDonald for the Deutsche Bank "Financial Reform" story: http://bit.ly/ak89wi // #hhrs #tcot #gop #teaparty #hhrs
Deutsche Bank Rips Into the Frank-n-Dodd "Financial Reform" [sic] http://bit.ly/ak89wi // A DISASTER!!! #hhrs #tcot #gop #teaparty #hhrs
Wednesday, July 7, 2010
Twitter Archive
An archive of some of my recent tweets:
Video preview of Thomas Sowell's "The Housing Boom and Bust" http://bit.ly/c2aGjQ Must Read! #hhrs #tcot #teaparty #gop
Thomas Sowell demolishes several common #econ fallacies of the left. http://bit.ly/aBO8F9 Wonderful stuff! #tcot #teaparty #hhrs #gop
RT @save_america1st Thomas Sowell: http://bit.ly/9Ih6yH just read it and RT it! #teaparty #tcot #gop #hhrs // The gr8st living #econ today!
RT @levanrami: Keynes vs. Hayek: The Great Debate Continues (Commentary) http://is.gd/djucI // Excellent! #tcot #teaparty #hhrs #econ #gop
RT @GreatHairGuy MARK YOUR CALENDAR: Tuesday, November 2, 2010 - National "Take Out The Trash Day"! #tcot #hhrs #teaparty #gop #nov!
RT @dkuroda: "Opportunity is missed by most people because it is dressed in overalls and looks like work." - Thomas A. Edison #hhrs #tcot
RT @dkuroda: "We have too many high sounding words, and too few actions that correspond with them" -Abigail Adams #in #teaparty #tcot #hhrs
@LizzieViolet Interesting discussion (first 5-10 min) contrib. of Jewish society to pre-war Vienna intellectual society http://bit.ly/duZazx
Friedrich August von Hayek: A wonderful interview, fascinating. Time very well spent. http://bit.ly/duZazx #econ #teaparty #tcot #gop #hhrs
To asses the effectiveness of an #econ system, look for unfettered price signals between producers and consumers. #hhrs #tcot #teaparty #gop
RT @FriedrichHayek: Hayek on Keynes, Britain & deflation during the British Depression of the 20s & 30s. http://hayekcenter.org/?p=3144
Americans: Federal government wastes fifty cents out of every dollar it spends. http://bit.ly/cM9s4M #hhrs #tcot #teaparty #econ #gop
"Tell the federal govt to GO AND SIT IN A CORNER AND LEAVE THE ECONOMY ALONE!" - John Bolton on Varney & Co., FBN #tcot #teaparty #econ #gop
To those who say an attack on Iran's nuke capab would be destabilizing, how would you rank it with a nuke in Tel Aviv? #tcot #israel #hhrs
Will any lefty admit that BP drilled in 5k ft because the eco-left won't let us drill on land or shallow water? #econ #tcot #teaparty #gop
Michael Steele: PLEASE STEP DOWN, this weekend, as leader of the GOP! Too many stupid mistakes! #tcot #gop #teaparty #RNC #NRSC #NRCC
What about inflation, are we seeing inflation or deflation? What's going on? http://bit.ly/aqXbiB #hhrs #tcot #teaparty #gop #econ
Does history agree that the recession would have been worse without Obama's stimulus spending? No! http://bit.ly/9TwWR2 #tcot #teaparty #gop
RT @VisedMonk: As we celebrate our freedom, please pray for Gilad Shalit's freedom; captive for 1,468 days now. #tcot #israel #christ #gop
Remarkable similarities between today and May 1930. You need to see this. http://bit.ly/dxtn5C
Financial reform in 1933 = 23 pages, in 2010 = 2300 pages. Does anyone believe lawmakers have become 100x smarter?
To those who say an attack on Iran's nuke capab would be destabilizing, how would you rank it with a nuke in Tel Aviv?
Bailouts are not medicine but cancer. We need to shrink size & scope of govt, spending, and taxes.
"The Whitehouse is like a Junior Achievement Project ... They really simply don't know what they're doing!" - Peter Morici
CBO says that the public debt will be more than 60% of GDP by year end due to fed spending.
The Frank-n-Dodd financial reform "monstrosity" is 1000's of pgs of legislated #econ uncertainty: http://bit.ly/90IRFK
We don't need more govt spending "aggregate demand" but more private sector "creative innovation" http://bit.ly/acnL3A
Ask yourself how govt spending could "create" an iPod4, an iPad, a cellphone or a Model T? http://bit.ly/acnL3A
"Conservatives divide the world in terms of good and evil while liberals do it in terms of the rich and poor." – Dennis Prager
"We get a 'do-over' when you fire all these people, so come November let's [clean house]!" Dave Ramsey
Rather than extend #unemployment: cut govt spending 50%, cut capgaintax 50%, and pass flat tax. I'd like my odds for employment.
A prescient conservative in Europe speaks out: http://bit.ly/cMSOuM - Thanks to Charles Payne.
Will any lefty admit that BP drilled in 5k ft because the eco-left won't let us drill on land or shallow water?
Video preview of Thomas Sowell's "The Housing Boom and Bust" http://bit.ly/c2aGjQ Must Read! #hhrs #tcot #teaparty #gop
Thomas Sowell demolishes several common #econ fallacies of the left. http://bit.ly/aBO8F9 Wonderful stuff! #tcot #teaparty #hhrs #gop
RT @save_america1st Thomas Sowell: http://bit.ly/9Ih6yH just read it and RT it! #teaparty #tcot #gop #hhrs // The gr8st living #econ today!
RT @levanrami: Keynes vs. Hayek: The Great Debate Continues (Commentary) http://is.gd/djucI // Excellent! #tcot #teaparty #hhrs #econ #gop
RT @GreatHairGuy MARK YOUR CALENDAR: Tuesday, November 2, 2010 - National "Take Out The Trash Day"! #tcot #hhrs #teaparty #gop #nov!
RT @dkuroda: "Opportunity is missed by most people because it is dressed in overalls and looks like work." - Thomas A. Edison #hhrs #tcot
RT @dkuroda: "We have too many high sounding words, and too few actions that correspond with them" -Abigail Adams #in #teaparty #tcot #hhrs
@LizzieViolet Interesting discussion (first 5-10 min) contrib. of Jewish society to pre-war Vienna intellectual society http://bit.ly/duZazx
Friedrich August von Hayek: A wonderful interview, fascinating. Time very well spent. http://bit.ly/duZazx #econ #teaparty #tcot #gop #hhrs
To asses the effectiveness of an #econ system, look for unfettered price signals between producers and consumers. #hhrs #tcot #teaparty #gop
RT @FriedrichHayek: Hayek on Keynes, Britain & deflation during the British Depression of the 20s & 30s. http://hayekcenter.org/?p=3144
Americans: Federal government wastes fifty cents out of every dollar it spends. http://bit.ly/cM9s4M #hhrs #tcot #teaparty #econ #gop
"Tell the federal govt to GO AND SIT IN A CORNER AND LEAVE THE ECONOMY ALONE!" - John Bolton on Varney & Co., FBN #tcot #teaparty #econ #gop
To those who say an attack on Iran's nuke capab would be destabilizing, how would you rank it with a nuke in Tel Aviv? #tcot #israel #hhrs
Will any lefty admit that BP drilled in 5k ft because the eco-left won't let us drill on land or shallow water? #econ #tcot #teaparty #gop
Michael Steele: PLEASE STEP DOWN, this weekend, as leader of the GOP! Too many stupid mistakes! #tcot #gop #teaparty #RNC #NRSC #NRCC
What about inflation, are we seeing inflation or deflation? What's going on? http://bit.ly/aqXbiB #hhrs #tcot #teaparty #gop #econ
Does history agree that the recession would have been worse without Obama's stimulus spending? No! http://bit.ly/9TwWR2 #tcot #teaparty #gop
RT @VisedMonk: As we celebrate our freedom, please pray for Gilad Shalit's freedom; captive for 1,468 days now. #tcot #israel #christ #gop
Remarkable similarities between today and May 1930. You need to see this. http://bit.ly/dxtn5C
Financial reform in 1933 = 23 pages, in 2010 = 2300 pages. Does anyone believe lawmakers have become 100x smarter?
To those who say an attack on Iran's nuke capab would be destabilizing, how would you rank it with a nuke in Tel Aviv?
Bailouts are not medicine but cancer. We need to shrink size & scope of govt, spending, and taxes.
"The Whitehouse is like a Junior Achievement Project ... They really simply don't know what they're doing!" - Peter Morici
CBO says that the public debt will be more than 60% of GDP by year end due to fed spending.
The Frank-n-Dodd financial reform "monstrosity" is 1000's of pgs of legislated #econ uncertainty: http://bit.ly/90IRFK
We don't need more govt spending "aggregate demand" but more private sector "creative innovation" http://bit.ly/acnL3A
Ask yourself how govt spending could "create" an iPod4, an iPad, a cellphone or a Model T? http://bit.ly/acnL3A
"Conservatives divide the world in terms of good and evil while liberals do it in terms of the rich and poor." – Dennis Prager
"We get a 'do-over' when you fire all these people, so come November let's [clean house]!" Dave Ramsey
Rather than extend #unemployment: cut govt spending 50%, cut capgaintax 50%, and pass flat tax. I'd like my odds for employment.
A prescient conservative in Europe speaks out: http://bit.ly/cMSOuM - Thanks to Charles Payne.
Will any lefty admit that BP drilled in 5k ft because the eco-left won't let us drill on land or shallow water?
Saturday, July 3, 2010
What about inflation? Why are we seeing deflation?
What is really happening with the money supply? Conventional wisdom says that huge deficits lead to inflation. On the other hand, so far, we have not seen inflation, but some sign of deflation. So what's going on with the money supply?
The government is printing dollars (and borrowing) like crazy to pay for their frenzied spending spree, but we aren't seeing inflation because businesses and households are hording dollars (gasp: "Savings"? What's that?). Business is holding more cash than at anytime in my lifetime, over $1.8 trillion: http://bit.ly/b91TFE The household savings rate is up to 4%, while it had been negative in recent years past. This would be great if it represented a permanent change in American savings psychology, but unfortunately what it seems to reflect short term uncertainty about the economy.
We could really use a long-term psychology that said saving for a rainy day is the responsible thing to do, rather than expanding public safety nets like unemployment insurance and so on. Individuals would be infinitely more responsible about providing for their own emergency needs than any government program can ever be. Unfortunately there is no reason to believe that this is what has happened.
Despite the massive printing of dollars, we're actually seeing deflation due to the currency being withheld from circulation. When individuals cannot keep up with their debts, they face debt judgements, wage garnishment, and loss of savings. In these extreme circumstances, people hold more cash as security. With less cash in circulation, prices tend to come down.Many key prices are actually in decline; gasoline, housing, cars, wages, etc.
Once business and consumers regain confidence, the great likelihood is that all of this horded currency will flush into the economy very quickly, causing a huge spike of inflation. This cycle of deflation pressure followed by an inflationary spike is quite classic and historic.
This will cause the Fed to raise interest rates to try to contract the money supply, but they will find it very difficult to control the expansion because the cash is already pre-positioned in the market. As interest rates go up, perhaps sharply, the debt service cost goes way up, and we could very easily see another bout of stagflation like we had under Carter. With rising interest rates you get another whole round of credit defaults because all this debt is still sitting out there, but now the debt service becomes MUCH more expensive and can't be afforded. Both government debt and personal debt service sucks up a great deal more income and we're right back in recession.
With it's debt service costs rising, the government debt becomes more and more difficult. There are two opposite instincts about how to deal with this on the political Left and the Right. The Left only sees tax increases, because cuts to spending represent cuts to their patronage power base. The Right knows that cuts to the size and scope of government are the only real solution.
The real question becomes, where can we find conservative politicians with the will and the rhetorical skills to champion the severe cuts to government spending and enttitlement programs that are desparately needed?
For now, investing in real estate is a real good bargain if you can qualify for a fixed 30yr mortgage at 4.5% and if you buy a bank-owned at a 30% discount. Gold is at least safe against inflation. Most dollar-denominated assets will go up in price under inflation, but they'll be declining while we're under deflation. Equities are tempting because with inflation their prices will go up, but it is hard to know how long we'll be in deflationary pressure and this severe market uncertainty.
Many entrepreneurs would love to start a business about now. Many creative people have become unemployed, and risk-taking becomes easier when you don't see many other choices, but you'd have to get your head examined to want to dive into this tax and regulation environment with a startup.
The uncertainty we keep hearing about is not misplaced. It would appear we're in for quite a wild ride.
The government is printing dollars (and borrowing) like crazy to pay for their frenzied spending spree, but we aren't seeing inflation because businesses and households are hording dollars (gasp: "Savings"? What's that?). Business is holding more cash than at anytime in my lifetime, over $1.8 trillion: http://bit.ly/b91TFE The household savings rate is up to 4%, while it had been negative in recent years past. This would be great if it represented a permanent change in American savings psychology, but unfortunately what it seems to reflect short term uncertainty about the economy.
We could really use a long-term psychology that said saving for a rainy day is the responsible thing to do, rather than expanding public safety nets like unemployment insurance and so on. Individuals would be infinitely more responsible about providing for their own emergency needs than any government program can ever be. Unfortunately there is no reason to believe that this is what has happened.
Despite the massive printing of dollars, we're actually seeing deflation due to the currency being withheld from circulation. When individuals cannot keep up with their debts, they face debt judgements, wage garnishment, and loss of savings. In these extreme circumstances, people hold more cash as security. With less cash in circulation, prices tend to come down.Many key prices are actually in decline; gasoline, housing, cars, wages, etc.
Once business and consumers regain confidence, the great likelihood is that all of this horded currency will flush into the economy very quickly, causing a huge spike of inflation. This cycle of deflation pressure followed by an inflationary spike is quite classic and historic.
This will cause the Fed to raise interest rates to try to contract the money supply, but they will find it very difficult to control the expansion because the cash is already pre-positioned in the market. As interest rates go up, perhaps sharply, the debt service cost goes way up, and we could very easily see another bout of stagflation like we had under Carter. With rising interest rates you get another whole round of credit defaults because all this debt is still sitting out there, but now the debt service becomes MUCH more expensive and can't be afforded. Both government debt and personal debt service sucks up a great deal more income and we're right back in recession.
With it's debt service costs rising, the government debt becomes more and more difficult. There are two opposite instincts about how to deal with this on the political Left and the Right. The Left only sees tax increases, because cuts to spending represent cuts to their patronage power base. The Right knows that cuts to the size and scope of government are the only real solution.
The real question becomes, where can we find conservative politicians with the will and the rhetorical skills to champion the severe cuts to government spending and enttitlement programs that are desparately needed?
For now, investing in real estate is a real good bargain if you can qualify for a fixed 30yr mortgage at 4.5% and if you buy a bank-owned at a 30% discount. Gold is at least safe against inflation. Most dollar-denominated assets will go up in price under inflation, but they'll be declining while we're under deflation. Equities are tempting because with inflation their prices will go up, but it is hard to know how long we'll be in deflationary pressure and this severe market uncertainty.
Many entrepreneurs would love to start a business about now. Many creative people have become unemployed, and risk-taking becomes easier when you don't see many other choices, but you'd have to get your head examined to want to dive into this tax and regulation environment with a startup.
The uncertainty we keep hearing about is not misplaced. It would appear we're in for quite a wild ride.
Would the recession have been worse without the stimulus bill?
The Obama administration and the Left have repeatedly claimed that their trillion dollar stimulus spending has prevented the recession from being worse than it would have been without it.
The simple fact is, there is absolutely no evidence to support this claim, and all historical evidence would suggest the opposite.
1) The Left points to the fact that the recession was worse in the beginning than it is now as evidence that their stimulus efforts have worked.
2) The truth is that all recessions, even when you do nothing at all, have a cycle to them. The market tends to recover through its own feedback mechanisms, and the history of recessions is that on average, this recession and the great depression have been the slowest recoveries in all the history of recessions.
3) History suggests that when you do nothing at all, most recessions begin to recover in twelve to eighteen months. For all Obama's claims that the recession would have been worse had we not passed his stimulus bill, history suggests to the contrary that we are either about on track or recovering more slowly than would be expected with no stimulus spending.
3) The two longest recessions in history have both been examples where the Government took up the Keynesian mantle of being "The Spender of Last Resort." The Great Depression lasted for more than a decade, and the most optimistic estimates now suggest that this recession will last at least four or five years more before unemployment has recovered. Some now fear a second dip as happened in the 1930s, which could foretell a similar length to the great depression.
4) Some of the shortest recoveries for severe recessions have occurred when the government did exactly the opposite of Keynesian government spending. In the 1920s and 1980s the government made sharp cutbacks in the size and scope of government, and government regulation, getting out of the way of the market to let it work more efficiently. Measured for initial severity, ultimate duration, and strength of recovery, these recessions represent two of the most successful recession recoveries in history.
There is NO evidence that Keynesian stimulus spending works, and very strong evidence that it makes matters worse.
The simple fact is, there is absolutely no evidence to support this claim, and all historical evidence would suggest the opposite.
1) The Left points to the fact that the recession was worse in the beginning than it is now as evidence that their stimulus efforts have worked.
2) The truth is that all recessions, even when you do nothing at all, have a cycle to them. The market tends to recover through its own feedback mechanisms, and the history of recessions is that on average, this recession and the great depression have been the slowest recoveries in all the history of recessions.
3) History suggests that when you do nothing at all, most recessions begin to recover in twelve to eighteen months. For all Obama's claims that the recession would have been worse had we not passed his stimulus bill, history suggests to the contrary that we are either about on track or recovering more slowly than would be expected with no stimulus spending.
3) The two longest recessions in history have both been examples where the Government took up the Keynesian mantle of being "The Spender of Last Resort." The Great Depression lasted for more than a decade, and the most optimistic estimates now suggest that this recession will last at least four or five years more before unemployment has recovered. Some now fear a second dip as happened in the 1930s, which could foretell a similar length to the great depression.
4) Some of the shortest recoveries for severe recessions have occurred when the government did exactly the opposite of Keynesian government spending. In the 1920s and 1980s the government made sharp cutbacks in the size and scope of government, and government regulation, getting out of the way of the market to let it work more efficiently. Measured for initial severity, ultimate duration, and strength of recovery, these recessions represent two of the most successful recession recoveries in history.
There is NO evidence that Keynesian stimulus spending works, and very strong evidence that it makes matters worse.
Thursday, July 1, 2010
Stuart Varney Interview with Peter Morici, July 1, 2010
Peter Morici, University of Maryland Professor of Economics:
Stuart Varney: “Are you predicting that the economy is going to fall off a cliff?”
PM: “Well, if we have a double dip, if we turn into a second recession, the economy won’t recover. The definition of a depression is a recession from which you cannot recover. The economy has natural resuscitative qualities, due to the inventory cycle, things of that nature; we’ve used that up this time around. If we take a second dip that won’t be present. What we’ve seen is the Obama administration is incapable of crafting economic policies that have permanent positive effects on the economy; its attack on the private sector from cap-in-trade, to higher marginal taxes, higher health care costs and so forth, all of these little things are adding up. What’s more, as we have discussed so many times in recent years Stuart, they are not addressing the fundamental problems; the trade deficit with China, the huge hole in demand for US Goods and services, and the bank reforms do nothing for the regional banks, those eight thousand banks don’t have cash to lend. Obama worries about Wall Street, not main street, finance not manufacturing, that’s why this could happen.
SV: Okay, now bring us up to date, and bring us up to speed on the big debate. I’m saying that the great debate is: Do we spend more and stimulate more with government money now, or do we cut back on spending and concentrate on deficit reduction now? Where do you stand in that debate?
PM: We certainly don’t spend more, I would not take back the remaining stimulus money, I would let it work itself through the system. However, I would at this time take very strong steps to address the trade deficit with China.
SV: Yeah but, but okay ...
PM: I would have a policy that …
SV: I know that’s your point …
PM: Hold on, hold on ...
SV: I know that’s your point …
PM: If you do that ...
SV: But, but …
PM: If you do that, if you do that, then you can cut spending.
SV: Okay.
PM: Because the increased demand that you’ll create that way for domestic goods and services permits you to cut spending. It permits you to lower the deficits in the United States, in Europe, if you do that.
SV: Am I right in saying that you’re looking for, overall, a loss of 150,000 jobs tomorrow morning?
PM: Yes I am. We’re essentially going to lose 200,000 census jobs, in round numbers, it’s very hard to get a fix on that even though they give us data. And so the question is: How many jobs are created net of that? Last month it was about 30,000, maybe this month it will be 50,000, that’s hardly enough to sustain this recovery.
SV: Okay. Professor Morici, it’s always a pleasure. Thanks very much for joining us again sir, appreciate it.
PM: Take care.
Stuart Varney: “Are you predicting that the economy is going to fall off a cliff?”
PM: “Well, if we have a double dip, if we turn into a second recession, the economy won’t recover. The definition of a depression is a recession from which you cannot recover. The economy has natural resuscitative qualities, due to the inventory cycle, things of that nature; we’ve used that up this time around. If we take a second dip that won’t be present. What we’ve seen is the Obama administration is incapable of crafting economic policies that have permanent positive effects on the economy; its attack on the private sector from cap-in-trade, to higher marginal taxes, higher health care costs and so forth, all of these little things are adding up. What’s more, as we have discussed so many times in recent years Stuart, they are not addressing the fundamental problems; the trade deficit with China, the huge hole in demand for US Goods and services, and the bank reforms do nothing for the regional banks, those eight thousand banks don’t have cash to lend. Obama worries about Wall Street, not main street, finance not manufacturing, that’s why this could happen.
SV: Okay, now bring us up to date, and bring us up to speed on the big debate. I’m saying that the great debate is: Do we spend more and stimulate more with government money now, or do we cut back on spending and concentrate on deficit reduction now? Where do you stand in that debate?
PM: We certainly don’t spend more, I would not take back the remaining stimulus money, I would let it work itself through the system. However, I would at this time take very strong steps to address the trade deficit with China.
SV: Yeah but, but okay ...
PM: I would have a policy that …
SV: I know that’s your point …
PM: Hold on, hold on ...
SV: I know that’s your point …
PM: If you do that ...
SV: But, but …
PM: If you do that, if you do that, then you can cut spending.
SV: Okay.
PM: Because the increased demand that you’ll create that way for domestic goods and services permits you to cut spending. It permits you to lower the deficits in the United States, in Europe, if you do that.
SV: Am I right in saying that you’re looking for, overall, a loss of 150,000 jobs tomorrow morning?
PM: Yes I am. We’re essentially going to lose 200,000 census jobs, in round numbers, it’s very hard to get a fix on that even though they give us data. And so the question is: How many jobs are created net of that? Last month it was about 30,000, maybe this month it will be 50,000, that’s hardly enough to sustain this recovery.
SV: Okay. Professor Morici, it’s always a pleasure. Thanks very much for joining us again sir, appreciate it.
PM: Take care.
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