Tag Archives: economics

Punishment

LOL, this is so funny. Some may have trouble understanding what Mr. Lindsey is saying in this article. Heck I had to read it again slowly to get the full drift. The bottom line is simple, raise the tax and get less revenue. LOL Makes sense to me, What an idiot this president is. That is unless he is doing it as Mr. Lindsey thinks, to punish the rich and the hell with revenue. OMG.

 

And if anyone is qualified to talk on this subject it is certainly Dr. Lawrence Lindsey, former Governor of the Federal Reserve System for six years.

The Biden administration last week proposed to increase the capital-gains tax rate—currently 20% for most assets held for at least a year—to 39.6% for people making more than $1 million. Since capital gains are also subject to the 3.8% Medicare tax, the new capital-gains rate would be 43.4%.

What makes this unusual is that 43.4% is well above the rate that would generate the most revenue for the government. Congress’s Joint Committee on Taxation, which does the official scoring and is no den of supply siders, puts the revenue-maximizing rate at 28%. My work several decades ago puts it about 10 points lower than that. That means President Biden is willing to accept lower revenue as the price of higher tax rates. The implications for his administration’s economic thinking are mind-boggling.

Even the revenue-maximizing rate is higher than would be optimal. As tax rates rise, the activity being taxed declines. The loss to the private side of society increases at a geometric rate (proportional to the square of the tax rate) as rates rise. The government collects more revenue, but its gains slow as the taxed activity declines. The revenue-maximizing rate is the point at which the government starts losing from higher taxes. Tax rates above the revenue-maximizing rate are punitive: The government is giving up revenue simply to punish the rich.

Punishing the rich is distinct from redistribution. Higher taxes on the rich to finance spending, or to transfer money to lower-income people, may be good for society’s welfare. Economists express this idea in a “social-welfare function,” which weights additional income received by different people, usually based on income. The same sum is considered less valuable if it goes to a high-income person than a lower-income one. The weights are subjective and different analysts will choose different weights.

Still, economists can agree that the ideal is to make someone better off without making someone else worse off. The simplest case is a voluntary exchange of goods for money, in which the buyer values the purchase at least as much as the price, while the seller values the money at least as much as the item being sold. Economists call such an exchange Pareto-optimal after Vilfredo Pareto, the Italian economist who formally framed the concept.

There is no choice in paying taxes, and usually the government is better off and the taxpayer is worse off. But above the revenue-maximizing rate, even the government is worse off. This is called Pareto-pessimal.

Generally, the government can raise tax rates and transfer the money to lower-income people, thereby improving social welfare. The government can do this even after incurring the economic burdens caused by higher rates and the costs of transferring money (known as the “leaky bucket”). The trade-off depends on how much tax rates distort the economy, how big the leaky-bucket effect is, and how one evaluates the difference in value of money going to people in different income groups.

As indicated by other proposals, the current administration rates money going to lower-income people extremely highly relative to higher-income people—higher than has traditionally been the case in U.S. economic policy. It also seems to put little weight on excess economic burdens and leaky-bucket costs. The wisdom of those choices will be tested at the ballot box.

But to an economist, a Pareto-pessimal choice is unwise by definition. There is no set of “weights” one can devise to justify this proposal, because there are no highly prized winners to offset the losses to the low-weighted losers.

The concept of social-welfare maximization has been a cornerstone of economic thinking across the political spectrum for the past century. It dates back at least to Adam Smith in the 18th century, and arguably to the 17th, when Jean-Baptiste Colbert, King Louis XIV’s finance minister, declared “the perfection of taxation consists in so plucking the goose as to procure the greatest amount of feathers with the least possible amount of squawking.”

That’s why it is shocking that this policy got past the economists in the administration, many of whom have had long and distinguished careers. The Biden administration is blowing up one of the key concepts that has united the economics profession: maximizing social welfare. It now believes in taxation purely as a form of punishment and is even willing to sacrifice revenue to carry it out.

Mr. Lindsey is president and CEO of the Lindsey Group. He served as a Federal Reserve governor (1991-97) and assistant to the president for economic policy (2001-02).

Originally posted 2021-04-26 15:14:18.

Boycott Economics 101

Here I go again. Folks, we need to shut up and do something. It’s time the silent majority, that is if there still is one, start taking some action. Who do these public corporation CEOs think they are that they can make any political statement they so choose and think it doesn’t matter? YES, it does matter, but only if we do something about it. Drink Pepsi instead of Coke. Now there is a company that does so much for Veterans; do some research on Pepsi and see what they do, and they don’t even brag about it. Yet that fool running Coke thinks he can say anything and the dumb, ignorant American will still buy his product. These CEOs monitor their bottom line on a daily basis. If we do as Greg suggests and stop buying  a product, the CEO would know about it in a week — guaranteed. We have the power, but only if we act. Are you willing to walk the walk, or just talk the talk?

 

 

 

 

 

 

By: G. Maresca

When Major League Baseball joined the Cancel Culture by moving their All-Star game out of Georgia thanks to legislation that enhanced the state’s election integrity, talk of boycotting MLB and those that do business with them went vogue.

Politically driven boycotts have deep nationalistic roots. In the 1760s, American colonists exasperated with high British taxation boycotted English goods giving rise to that American revolutionary rally: “taxation without representation.” The civil-rights crusade was initiated by the 1955 boycott of the segregated bus system of Montgomery, Alabama led by Rosa Parks.

In the 1960s, the United Farm Workers boycotted California farmers who employed nonunion workers. After Nike was exposed exploiting foreign sweatshops, sales dropped. However, these two boycotts were about changing business practices.

The comparison to someone burning a $150 Nike football jersey is laughable. Since the jersey has already been paid for such shenanigans only impacts the jersey’s owner. Pseudo-boycotts are identity politics and ineffective.

They are not a solution, but an illusion.

When politics cannot find common ground, boycott. Boycotters must sacrifice. Those who took part in the Montgomery boycott knew their lives would be more difficult.

A sincere and authentic boycott must be logical, organized, and sustained. These qualities are too often lacking in contemporary America.

CEOs do not fear offending the silent majority, who are presumed not to boycott or protest. They see conservatives as submissive and wanting to get along. Political and personal insult are of no substance to them. The time has arrived for the silence to end, particularly when it comes to money. If you want change, spend accordingly.

Companies are not immune to the bottom line; they are its hostage.

If a quarter of the 74 million who voted for Trump started boycotting businesses a long overdue message would be heard and done peacefully unlike how the left operates. The strength of conservative buying power was realized when Alexandria Ocasio-Cortez called for a boycott of Goya and when the Left called out Chick-Fil-A.

In both instances, sales increased.

Economic pain is possible, but it takes a conscious effort. If the corporate world feels the economic heat, change could follow, but keep in mind Rome did not fall in a month.

Neutrality in business is best, but that is lost on Delta Air Lines and Coca-Cola who also adamantly opposed Georgia’s legislation. It is easier to vote in Georgia today than it is to check a bag, go through TSA security, and get on a Delta flight that has always required identification.

Coca-Cola promotes racism by telling employees to “be less white” associating whites as being domineering, condescending, and boorish. Imagine the media storm had Coca-Cola asked people to “be less black.” Recall that “New Coke” flopped a generation ago. Today’s Woka-Cola could be its 2.0.

Democrats want to eliminate CO2. Every Coke product and consumer emits CO2. Delta might consider their rising fuel costs in this green era of Biden. Being the Left’s useful idiot is not going to protect them from their extremism, but some must learn the hard way. Their fiduciary responsibility is to their shareholders and customers.

They are failing both.

The power of the bottom line exists, provided it is exercised. It is not complicated. Do not buy from companies who pay more attention to politics and social media than they do running their businesses.

There are no good reasons for any corporation to become involved in politics that don’t directly impact their profitability.  As Michael Jordan said, “Republicans buy sneakers, too.” America is already too politically polarized. Corporate leaders could help rather than hinder by not making their brands a political baseball.

Too many conservatives offer up nothing but excuses for not boycotting. The only thing they loathe more than injustice is inconvenience. W.B. Yeats’ poem “The Second Coming,” written in the aftermath of World War I speaks to us today: “The best lack all conviction, while the worst are full of passionate intensity.”

Stop waiting for politicians to collectively change the culture.

Change begins with the reflection you see in the mirror.

MLB Hall of Famer Yogi Berra summarized it like only he could: “If people don’t want to come to the ballpark you cannot stop them.”

Add Ben & Jerry’s to the list of cancel culture, left wing corporations who think they immunize to consumer influence. The ice may be good but it sure is expensive, so buy another brand. Shut their big mouths down!!

Originally posted 2021-04-15 11:14:04.

Truth, Fiction, or just Comedy?

LOL, all the goings on in America today would be so funny  if it weren’t all true. The daily news is absolutely astonishing, and we as Patriotic conservative Americans seemed to be able to only sit by and watch it all happen. I usually rely on certain news sites I watch or from articles sent to me by a few regular contributors. However, it has become such that there is so much “news items” everyday, I find it difficult to keep up with it all . So in an effort to absorb all the events and comments I shall simply give you a potpourri of today’s “news,” But try and keep your sense of humor, I had a hard time myself with some of it..

Brady Labeled ‘Racist’ for Winning Super Bowl During Black History Month

Welcome to Biden’s America, where you are “racist” if you win a Super Bowl as a white man during Black History Month.

Read that again. This is really the level of ignorance we are dealing with.  After Tampa Bay Buccaneers spanked the Kansas City Chiefs in Super Bowl LV on Sunday, the trolls were triggered and began calling out Bucs quarterback Tom Brady as racist, and having white privilege.

The Tatum Report:

Brady is no stranger to controversy and last week in ‘USA Today’ Nancy Armour attacked him for not only being white, but for his apparent support for Donald Trump.

It won’t come as much of a surprise that Twitter users are calling his victory over Patrick Mahomes “racist” … because it happened during Black History Month.

Tom Brady beating a black QB during black history month just feels racist

— ~zaib~ (@Zaib_12) February 8, 2021

Something about Tom Brady winning a Super Bowl during Black History Month just feels racist.

— Openly Black. (@iintrepid) February 8, 2021

Biden Picks Mahomes, Then Brady Leads Bucs to Blowout Victory

Joe Biden loses again…which is quite the trend. Seems the only time he can win is if there is cheating involved.

On Sunday night, Biden was asked whom he would rather receive a pass from: Chiefs’ Quarterback Patrick Mahomes, or Buccaneers’ Tom Brady. He chose Mahomes…

Jemele Hill Cries About NFL ‘Blackballing’ Kaepernick After Super Bowl Ad

Boo-hoo! Social justice warriors are ALWAYS crying about something. Now, former ESPN commentator Jemele Hill is whining about the NFL and how they “forgot” to mention that they “blackballed” Colin Kaepernick during a Super Bowl ad announcing $250 million for social justice issues.

The NFL aired a commercial just before halftime that stated “football is a microcosm of America” and proceeded to show images of civil rights activists and NFL players with the hashtag “#InspireChange.”  Pro Football used to be a microcosm of America, and maybe college still is, but Pro? No way. The whole NFL organization makes me want to throw up when I think about where they going. The Comish himself is a racist pig

Over 1 Million Jobs are Toast with Biden’s $15 Minimum Wage

A minimum wage increase SOUNDS like a good idea on paper. However, that’s all it is. It is not an idea that will work out for Americans in real life. We are not a socialist country.

Here’s the thing, if minimum wage increases, then there are a few things that will happen:

1. People will lose their jobs

2. Employees will receive less hours

3. Inflation

If businesses are forced to pay employees more, then those businesses will have to lay off employees and/or schedule their employees for less hours in order to make ends meet. In addition, the products and services being provided will cost more because the company needs to make more money in order to pay their employees more and buy the products they need in order to keep their business running.

Come on people, get serious. Companies are in business to make a profit. Raise any of their overhead e.g., rent, utilities, wages, advertising, etc. they MUST raise the price of whatever they are selling, and if the current price is at it’s max, and cannot be raised, they must close their doors. Economics 101

And now the best for last

Gov. DeSantis on Maskless Super Bowl Photo: ‘How the Hell am I Going to Drink a Beer?’

Florida Governor Ron DeSantis gave an invisible finger to liberals on Sunday when he attended the Super Bowl without a mask. Not only did he go maskless, but he also gave an epic explanation as to why he didn’t wear one.

The Republican governor said on Monday, “Someone said, ‘Hey, you were at the Super Bowl without a mask. But how the hell am I going to be able .. but how the hell am I going to be able to drink a beer with a mask on? Come on. I had to watch the Bucs win.”

Of course they don’t mention that he is in an enclosed executive suite. But I loved his reply. He’s simply a normal guy who expects to have a beer at a football game. We love our Gov!

Originally posted 2021-02-10 11:51:21.

Is USAA Too Big?

My unequivocal answer is YES! Next month, I will have been a member of USAA for forty-nine years. USAA has been my only bank, auto and home insurer, my brokerage firm, and until recent years my home loan company since February 1974. I was eagerly looking forward to getting my 50-Year sticker for my car next year, but that will not happen. Why do you ask? Well, bear with me and I will try to explain as briefly as possible. And I ask all those whom I had been responsible for recommending this one-time superb company to you to please read carefully and make your own decision. I am sorry.

As has happened over the years, back in December I had a suspected fraud incident on my rewards credit card, which my bride and I both have a card on that account. First let me explain that we use that card for EVERYTHING, and I do mean everything. Oftentimes I only have a few bucks in my wallet. In fact, I even bought my 2012 Mini Cooper on the card. Anyway, I called USAA and as always, I got a very polite, courteous, and knowledgeable agent who promptly took care of the problem by cancelling my card and issuing another.

I commented about having to notify all the companies that hit that card for monthly debits e.g., utilities, etc. She recommended I get another card and use it for bill paying but put the card in a drawer and not use it to buy anything but continue to use the current card for everyday purchases like gas, groceries, online purchase. That way if a fraud incident happened, I would not have to notify anyone of the card change. I thought WOW, what a great idea. I thanked her profusely. She transferred me to a credit card application agent who, as always, was another very polite, and knowledgeable agent. I explained what I wanted to do, and she agreed stating she does the same thing with two cards. I spent about forty-five minutes having to listen to four disclosures and filling out the application. She put me on hold and submitted it to the Underwriting Department. She came back on and informed me my application was disapproved. WHAT?

She blamed the disapproval on an Experian credit report. I asked for a copy of the letter outlining the refusal, which she forwarded to me. I immediately went to Experian and pulled up my credit report. My credit score was 803, and every comment on every account was favorable. They did mention I had too many inquiries during the last twelve months. I refinanced my house twice during the year to get down to a 1,75%. VA loan. Their last comment was, and I quote, “There are no unfavorable comments on this report”. Was I pissed? You Betcha!

I am an Economist by education and hobby; I understand the banking industry and the FED rules. This disapproval was not a result of a banking industry rule; it was USAA’s. I called USAA asking to speak to a supervisor or manager and was told none were available, but she would make a note and as soon as one became available, I’d get a call, – I never did!  So, as I have done one other time over the years, I wrote the CEO, now Mr. Wayne Peacock, a personal letter knowing full well he would never actually see the letter since he has a department who handles his letters – they are too big for him to be bothered with such trivial matters.

About two weeks later I received an email stating USAA had tried to reach me by telephone but was unable to. I never received a voicemail nor a phone call from them. However, they did provide a link for me to call them back, which I did.  The extension was to the CEO’s grievance department. I was told it was a recorded call. She said she was calling about my problem with a fraud charge on my credit card – she obviously had not understood the reason for the letter; therefore, I had to enlighten her. We spoke for almost an hour, and I got the party line – sorry too many inquiries. I asked if there were any mitigating circumstance considered e.g., longevity with the company, or even some sort of loyalty to a member’s record of NEVER paying a dime in interest charges or late fees. She said no, everyone is treated alike to be “fair.” She understood my frustration, but there was nothing she could do as too much time had passed. My only alternative was to reapply, but there is no way to tell what the result would be.

I asked if the CEO had seen the letter, and she said no. I asked was there any way for her to get him to see it; she said she would try, but there was no guarantee. She did say she would try and contact the underwriting dept and see if there was any way at all for them to relook at it, and she would get right back to me. That was over a week ago and I have not heard from her and won’t.

The fact is USAA has gotten too big. I am simply just another client, one of the masses and my record means nothing to them. Don’t get me wrong, it has nothing to do with my retired rank. Oh yes, they call me Colonel Bathurst when I talk to the nice agents, but that is not the point. I am talking about forty-nine years of an exemplary record.

As I stated in my letter, when I joined USAA, it was for officers only. Then they lowered it to E-7’s and above, which I applauded. Then as I best as I can remember they lowered it to E-4’s and above, Again I applauded that action. Then they lowered the threshold to any Vet with an honorable discharge or a general under honorable conditions. That concerned me! I considered that a mistake. Did they understand who gets a general discharge under honorable conditions? As many of you reading this will surely understand, many of those are not the most favorable vets around. It means they probably had official problems such as a court martial or several Article 15’s, and they just weren’t up to par with their peers. I personally believe that move has caused USAA some problems, which may be why our year-end bonuses are not what they used to be. Granted there were many who were young, wild, and foolish, and may have done something to grant that discharge, but have now grown up and became reliable trustworthy citizens.

One more issue in the letter. My RV was totaled during Ina. My insurer, Nationwide since USAA sends you Progressive because they don’t insure RV’s, paid off the loan. A debit to my checking account was to hit in two days. The loan company, US Bank because USAA’s interest rates are over the top compared to them. I called US Bank asking them to not issue the debit because of the loan being paid off. The agent said she would try but it normally takes two days to stop it, but she would try to expedite it. It was Thursday and the debit was to take place on Monday. She recommended I call my bank and tell them to not accept the debit in case she cannot stop it. I called USAA and was told it takes them three “business days” to execute a stop. I did not know USAA’s computer systems and data updating do not work on weekends. Luckily, US Bank came through and it was not executed. Maybe I will go to US Bank when I leave USAA, they don’t seem to be too big.

Sadly, I am done. I will not get my 50-year sticker. As soon as I get my year-end bonus and my senior bonus in February, I will un-ass USAA and take my business to another financial institution who understands there are exceptions to every rule, and one who recognizes and appreciates longevity and loyalty.

Cavet Emptor,

Jim

PS, Strangely, I have in recent years spoken to several members, even within my own family who also left USAA for a variety of reasons, all of which point to being too big. I do know I can get auto insurance locally for a lot less than USAA even considering their yearly bonuses, but I stayed with them for loyalty reason.

Additionally, in Oct 2017 I posted a letter I had sent to then CEO, Mr. Stuart Parker, about their advertising campaign. And I did get a call, but not from him. You can see my posts should you desire.

Originally posted 2023-01-08 13:05:48.

Is This The Plan?

For those unfamiliar, the Proceedings is a monthly journal published by the U.S. Naval Institute, which is a non-profit membership association serving a community of individuals who participate in an open forum to debate key issues in the Sea Services. There is no government support and they do not lobby for special interests. It is an  independent, professional military association with a mission, goals, and objectives that transcend political affiliations. In other words it “ain’t” woke  or non-woke. Every essay published in the Proceedings is very well documented and researched; they are strictly opinion pieces, but oh so interesting.

Please read this well thought-out and thoroughly documented essay that could very well be “The Plan.” Pay special attention to paragraph I have highlighted in blue. God help us!

Welcome to the U.S. Naval Institute

The home of influential debate since 1873

The U.S. Naval Institute provides an independent forum for those who seek to advance and strengthen the naval profession.

Krulak was right in 1957, and what he said is even more true today. The Army, Navy, and Air Force are fully capable of performing the Marine Corps’ missions. The Army can assume the light infantry and amphibious assault responsibilities. The 1944 invasion at Normandy, the largest invasion in history, was solely an Army effort for the United States. As far as Marine Corps air, the Navy and Air Force are fully capable of close air support, while the Army can also execute the needed rotary and tilt wing missions. The nation wants the Marines. The question may be how to keep the aspects the nation wants, while eliminating the Marines as a separate branch and reaping the benefits of a simplified chain of command, smaller overall force, and another base realignment and closure (BRAC) evolution.

Deconstructing the Marine Corps

So, what aspects does the nation want? If the Marine Corps answers that question, the answer will probably be what it currently has, but with better funding. The informal Marine Corps propaganda apparatus, which President Truman begrudgingly complimented as second in the world only to Joseph Stalin’s, will demand the status quo. For the first time in a generation, the lack of significant numbers of former service members in Congress—coupled with national fatigue after fighting an unsuccessful, two-decade-long war—may allow this topic to be discussed seriously.

Perhaps the easiest part of the current Marine Corps to remove is aviation. There is unlikely to be a huge support community with the nation for Marine aviation, especially the fixed-wing aspects. For most Americans, their knowledge of Marine aviation is likely limited to watching Flying Leathernecks (1951) and The Great Santini (1979). Likewise, the average citizen may see no difference between Marine rotary and tilt-wing aviation and its Army equivalents. The average citizen likely sees no difference because the differences that do exist—primarily the ability to fly from ships—are minor. The nation does not need a separate Marine Corps aviation force and few in the nation likely know enough about it to want it. Eliminating Marine aviation by incorporating it into the Army and Navy would halve the size of the service, which currently is around 184,000 active-duty members.

The U.S. public is far less likely to accept the complete disappearance of the Fleet Marine Forces, the ubiquitous “Mud Marine.” Stripped of aviation, the Marine Corps would resemble the Army’s XVIII Airborne Corps, both in size (approximately 88,000 troops) and capabilities—both are light infantry, both are air-mobile, and both are capable of airborne and amphibious operations. Both consider themselves to be “elite” forces with strong esprit de corps. Transition of the Fleet Marine Forces into the Army’s yet-to-be created XIX Marine Amphibious Corps would retain the needed amphibious expertise, simplify the chain of command, and could be done in a way that retains many of the unique elements that make a Marine a Marine.

Establishing the Army’s XIX Marine Amphibious Corps at Camp Pendleton on the west coast would give the nation a light infantry “center of excellence” on each coast. Reducing the Marine Corps Commandant to a three-star general, mirroring the XVIII Corps commander, would help reduce the gradual increase in rank structure seen over the past 50 years across the Department of Defense (DoD). Army traditions are likely flexible enough to retain many of the cherished Marine Corps’ accoutrement, like the dress blues and the eagle, globe and anchor emblem. The Army airborne troops currently have their maroon berets and cavalry units have their cowboy hats and spurs. Also, if the XVIII Corps can informally use the term “top” for the command first sergeant, the XIX Corps might well use “gunny” for E-7s. Likewise, young men and women could enlist to be Marines and continue to go through Parris Island for boot camp.

Incorporating the Marine Corps into the Army would significantly simplify the DoD chain of command and eliminate the need for the Commandant to go to the Army and beg for future armor and artillery support. Likewise, the Marines of the XIX Corps would have an equal chance of obtaining any new capabilities integrated into the Army, while potentially allowing Army leaders to reduce the operational tempo of both Corps, although both will still be rapid-deployment units.

To say that Marines would resist incorporation into the Army and Navy is a gross understatement. However, there are concessions that might make it slightly less toxic for the Marines and less objectionable to the public and Congress. Allowing Marine fixed-wing pilots inducted into the Navy to finish out their career using Marine Corps ranks and uniforms would likely help and given the Navy’s history of mixed uniforms, would probably go unnoticed by the public. Similar concessions for the generation of current Marines incorporated into the Army could potentially ease their transition. But regardless of how successful these mitigation efforts are, the DoD would likely be looking at a decade of angst and occasional confusion. The key will be Congress, which will have to rewrite legislation, including U.S. Title 10. As mentioned previously, there are fewer Marines in Congress today than at any time since the early 1950s (there are 15 Marine Corps veterans in the 117th Congress). This, coupled with the inevitable savings from another round of base closures, might be enough to see the initiative championed by President Truman and advocated by Generals Eisenhower and Marshall completed.

General Krulak correctly stated the United States does not need but wants the Marine Corps. For the best interests of the nation, the DoD should at least learn if the U.S. public and Congress will accept a XIX Marine Amphibious Corps. If the answer is yes, then a myriad of questions will have to be answered: Does the nation need two separate light infantry corps? Which Marine Corps installations will be closed or reduced? How many Marine Corps military and civilian personnel, made redundant by the changes, will be discharged? And what, if anything, will remain as a Navy police force? If the topic is given a fair hearing, the answers may surprise us all.

Commander Denny is a retired reserve naval intelligence officer with service beginning in Vietnam in 1972 as an aviation electrician’s mate and retiring in 2010 as a commander. In addition to his reserve service, he was a civilian electronics engineer for the Army Missile Command and an intelligence analyst for the Defense Intelligence Agency (DIA), with four deployments to Iraq. After retiring from DIA, he served as a senior intelligence analyst for U.S. Central Command with one additional Iraq tour.

Originally posted 2021-12-13 12:27:55.