Saturday , August 24 2019
Home / ProGrowthLiberal

ProGrowthLiberal



Articles by ProGrowthLiberal

Record Income Taxes?

1 day ago

Record Income Taxes?

I should read more posts from Kevin Drum:
The Yahoo News reporter comes close to explaining what happened by noting that there were more returns in 2018 than 2017. As you might guess, this happens every year as the US population increases. So let’s take a look at personal income tax receipts adjusted for inflation and population growth … In reality, income tax receipts were down 2.6 percent in 2018 compared to 2017. What this means, unsurprisingly, is that when you cut tax rates you get less revenue. When you fail to account for things like inflation and population growth, nearly every year is an “all-time high.” But that’s meaningless.
Let’s turn to BEA Table 3.2. Federal Government Current Receipts and Expenditures. Personal

Read More »

Record Income Taxes?

2 days ago

I should read more posts from Kevin Drum:

The Yahoo News reporter comes close to explaining what happened by noting that there were more returns in 2018 than 2017. As you might guess, this happens every year as the US population increases. So let’s take a look at personal income tax receipts adjusted for inflation and population growth … In reality, income tax receipts were down 2.6 percent in 2018 compared to 2017. What this means, unsurprisingly, is that when you cut tax rates you get less revenue. When you fail to account for things like inflation and population growth, nearly every year is an “all-time high.” But that’s meaningless.

Let’s turn to BEA Table 3.2. Federal Government Current Receipts and Expenditures. Personal current taxes (nominal) rose from $1613 billion in 2017

Read More »

Barro’s Misstated Case for Federal Reserve Independence

22 days ago

Barro’s Misstated Case for Federal Reserve Independence

I guess I should applaud Robert Barro for standing up for the independence of the Federal Reserve and hoping it can resist political pressure to lower interest rates too much. But there are two aspects of his case that strike me as silly to say the least starting with his opening sentence:
In the early 1980s, the chairman of the US Federal Reserve, Paul Volcker, was able to choke off runaway inflation because he was afforded the autonomy necessary to implement steep interest-rate hikes.
This statement glosses over the fact that we had a macroeconomic mess in 1982. This mess was in part to blame on an ill advised fiscal stimulus initiated the moment St. Reagan took office. But clearly the Federal

Read More »

Barro’s Misstated Case for Federal Reserve Independence

22 days ago

I guess I should applaud Robert Barro for standing up for the independence of the Federal Reserve and hoping it can resist political pressure to lower interest rates too much. But there are two aspects of his case that strike me as silly to say the least starting with his opening sentence:

In the early 1980s, the chairman of the US Federal Reserve, Paul Volcker, was able to choke off runaway inflation because he was afforded the autonomy necessary to implement steep interest-rate hikes.

This statement glosses over the fact that we had a macroeconomic mess in 1982. This mess was in part to blame on an ill advised fiscal stimulus initiated the moment St. Reagan took office. But clearly the Federal Reserve overreacted. To be fair – Barro continues his magical history tour in a reasonable

Read More »

Why is John Cochrane Nodding to a Gold Bug?

29 days ago

John Cochrane gave a preview of a WSJ oped he wrote in response to something from James Grant. Permit me to be brief about the utter nonsense from Grant before noting the more worthwhile discussion from Cochrane:

Jim Grant: The Big Flaw in Ph.D-conomics: The Ph.D. standard of monetary management was the topic on the agenda at the July 15 panel at the American Enterprise Institute in Washington. Discretionary central-bank policy conducted by former tenured economics faculty, or by people imbued with the doctrines of those learned people, is the system in place today. We discussants pulled at our chins: Is the system any good at all? It’s a timely, down-to-earth question. Federal Reserve Chairman Jerome Powell, though a lawyer by trade, does business in a building infused with

Sorry but I

Read More »

Mankiw Misrepresents a Story on Senator Sanders Campaign Worker Negotiations

July 22, 2019

Mankiw Misrepresents a Story on Senator Sanders Campaign Worker Negotiations

Greg Mankiw reads this story and writes:
Staffers in the Sanders campaign, who are working on salary, complain that they are paid less than the $15 per hour that Senator Sanders advocates for the minimum wage. So Sanders raises their hourly wage. Does that increase their income? No, because he raised the hourly wage by cutting the number of hours they work! Of course, if a President Sanders raised the federal minimum wage, I am sure he would be confident that the change would not have any adverse employment effects. Downward-sloping demand curves may describe socialist political campaigns, but back in the actual capitalist economy, the laws of supply and demand work completely

Read More »

Mankiw Misrepresents a Story on Senator Sanders Campaign Worker Negotiations

July 22, 2019

Greg Mankiw reads this story and writes:

Staffers in the Sanders campaign, who are working on salary, complain that they are paid less than the $15 per hour that Senator Sanders advocates for the minimum wage. So Sanders raises their hourly wage. Does that increase their income? No, because he raised the hourly wage by cutting the number of hours they work! Of course, if a President Sanders raised the federal minimum wage, I am sure he would be confident that the change would not have any adverse employment effects. Downward-sloping demand curves may describe socialist political campaigns, but back in the actual capitalist economy, the laws of supply and demand work completely differently.

OK – he started his post by saying it is a wonderful story, which is true. But as I read the

Read More »

Pence’s Potemkin Village on the Mexican Border

July 15, 2019

Pence’s Potemkin Village on the Mexican Border

Merriam Webster defines a Potemkin Village as:
an impressive facade or show designed to hide an undesirable fact or condition
Mike Pence visited a Potemkin Village in Donna, Texas:
Pence also visited a tent-like temporary detention facility in Donna, Texas, that holds unaccompanied children and immigrant families. The new and mostly clean facility stood in stark contrast to the McAllen station Pence later visited.
While the Buzzfeed story focused on the McAllen station, which depicted horrific conditions, I’m sure Trump’s favorite “news” outlets will highlight the facility in Donna, Texas. In other words, part of Pence’s visit to the border was designed to con the American people that immigrants are being

Read More »

Pence’s Potemkin Village on the Mexican Border

July 13, 2019

Merriam Webster defines a Potemkin Village as:

an impressive facade or show designed to hide an undesirable fact or condition

Mike Pence visited a Potemkin Village in Donna, Texas:

Pence also visited a tent-like temporary detention facility in Donna, Texas, that holds unaccompanied children and immigrant families. The new and mostly clean facility stood in stark contrast to the McAllen station Pence later visited.

While the Buzzfeed story focused on the McAllen station, which depicted horrific conditions, I’m sure Trump’s favorite “news” outlets will highlight the facility in Donna, Texas. In other words, part of Pence’s visit to the border was designed to con the American people that immigrants are being treated well. Leon Panetta is right:

Trump treats Americans like we’re chumps

Read More »

The Rise of Global Innovation by US Multinationals

July 11, 2019

The Rise of Global Innovation by US Multinationals

Lee G. Branstetter, Britta Glennon, and J. Bradford Jensen of the Peterson Institute for International Economics provide an interesting discussion of the risks and opportunities from the following:
Total US R&D spending as a share of GDP increased slightly from 2.5 percent in 1999 to 2.7 percent in 2016.2 Multinationals are an important driver of aggregate R&D spending in the United States.3 Their share of total US R&D spending was 57 percent in 2015.4 US MNCs play a disproportionately important role in driving innovation within the United States. At the same time, US MNCs have dramatically increased their overseas R&D expenditures. Figure 1 shows that US MNCs’ foreign R&D expenditures increased from

Read More »

The Rise of Global Innovation by US Multinationals

July 9, 2019

Lee G. Branstetter, Britta Glennon, and J. Bradford Jensen of the Peterson Institute for International Economics provide an interesting discussion of the risks and opportunities from the following:

Total US R&D spending as a share of GDP increased slightly from 2.5 percent in 1999 to 2.7 percent in 2016.2 Multinationals are an important driver of aggregate R&D spending in the United States.3 Their share of total US R&D spending was 57 percent in 2015.4 US MNCs play a disproportionately important role in driving innovation within the United States. At the same time, US MNCs have dramatically increased their overseas R&D expenditures. Figure 1 shows that US MNCs’ foreign R&D expenditures increased from nearly $15 billion in 1997 to over $55 billion in 2015. In some industries, the growth

Read More »

Housing: Elizabeth Warren v. John Cochrane

July 2, 2019

Housing: Elizabeth Warren v. John Cochrane

Noah Smith has a lot of praise for the economic policy proposals from Elizabeth Warren. I’ll mention only one:
With costs for shelter eating a bigger piece of Americans’ paychecks, and local government paralyzed by incumbent homeowners, the country needs a big solution. Warren’s would combine incentives for raising zoning density with increased public construction”.
This is interesting in light of John Cochrane’s rant attacking the Democrats on the housing issue. Read it for yourself. Cochrane only noted the increased public construction aspect and tried to tell his readers that only Cory Booker wanted to reform zoning issue. While Cochrane admitted increased housing supply would be a good idea – he slandered

Read More »

Housing: Elizabeth Warren v. John Cochrane

July 1, 2019

Noah Smith has a lot of praise for the economic policy proposals from Elizabeth Warren. I’ll mention only one:

With costs for shelter eating a bigger piece of Americans’ paychecks, and local government paralyzed by incumbent homeowners, the country needs a big solution. Warren’s would combine incentives for raising zoning density with increased public construction”.

This is interesting in light of John Cochrane’s rant attacking the Democrats on the housing issue. Read it for yourself. Cochrane only noted the increased public construction aspect and tried to tell his readers that only Cory Booker wanted to reform zoning issue. While Cochrane admitted increased housing supply would be a good idea – he slandered any government efforts to do so. No wonder he’s the “grumpy economist”!

Read More »

Donald Trump – Don’t Insult Our Team at the World Cup

June 28, 2019

Donald Trump – Don’t Insult Our Team at the World Cup

At 3PM EDT on Friday, I’ll be watching the coverage via Fox of our great women’s soccer team playing the host team in Paris. It is only the quarterfinals of the World Cup and yet this may be the game of the entire match. Unfortunately the Idiot in Chief has been writing a lot of insulting tweets:
President Donald Trump has invited the U.S. women’s soccer team to the White House, regardless of whether they win the World Cup, after Megan Rapinoe’s assertion that she is “not going to the f—ing White House.” Rapinoe, who has described herself as a “walking protest” to Trump’s policies, made her recent comments about a potential White House visit to soccer magazine Eight by Eight.
I support Megan Rapinoe

Read More »

Donald Trump – Don’t Insult Our Team at the World Cup

June 26, 2019

At 3PM EDT on Friday, I’ll be watching the coverage via Fox of our great women’s soccer team playing the host team in Paris. It is only the quarterfinals of the World Cup and yet this may be the game of the entire match. Unfortunately the Idiot in Chief has been writing a lot of insulting tweets:

President Donald Trump has invited the U.S. women’s soccer team to the White House, regardless of whether they win the World Cup, after Megan Rapinoe’s assertion that she is "not going to the f—ing White House." Rapinoe, who has described herself as a "walking protest" to Trump’s policies, made her recent comments about a potential White House visit to soccer magazine Eight by Eight.

I support Megan Rapinoe and guess what – her teammates do too:

I am not going to fake it, hobnob with the

Read More »

Ali Velshi Interviews Arthur Laffer

June 24, 2019

Ali Velshi Interviews Arthur Laffer

Today I endured listening to Arthur Laffer lie serially to Ali Velshi today. Skip the first 36 minutes of this Youtube as the interview begins there. Never mind the praise for Laffer’s cheerleading for Trump. Laffer actually claimed that the FED’s low interest rates after the Great Recession began was the cause of the Great Recession. OK! But then he pivots and advocates we should have low interest rates now that Trump is President. I know – WTF?! OK – don’t trust Laffer on monetary policy but the real fun was when he claimed that the Reagan tax cut of 1981 led to average annual growth rates of 8% during his first term. I think that is what Laffer is claiming but BEA data suggests much lower growth rates for real GDP.

Read More »

Ali Velshi Interviews Arthur Laffer

June 24, 2019

Today I endured listening to Arthur Laffer lie serially to Ali Velshi today. Skip the first 36 minutes of this Youtube as the interview begins there. Never mind the praise for Laffer’s cheerleading for Trump. Laffer actually claimed that the FED’s low interest rates after the Great Recession began was the cause of the Great Recession. OK! But then he pivots and advocates we should have low interest rates now that Trump is President. I know – WTF?! OK – don’t trust Laffer on monetary policy but the real fun was when he claimed that the Reagan tax cut of 1981 led to average annual growth rates of 8% during his first term. I think that is what Laffer is claiming but BEA data suggests much lower growth rates for real GDP. OK – we all know that Laffer lies a lot but why on earth does MSNBC

Read More »

A Very Erroneous Chart in the Economic Report of the President

June 7, 2019

A Very Erroneous Chart in the Economic Report of the President

Menzie Chinn has been reading the latest Economic Report of the President and finds a very erroneous and misleading chart, which is figure 1-6 from this this document (see page 45), which states:
Equipment investment, in particular, exhibited a pronounced spike in the fourth quarter of 2017, as both the House and Senate versions of the TCJA bill, which were respectively introduced on November 2 and November 9, stipulated that full expensing for new equipment investment would be retroactive to September 2017. This created a strong financial incentive for companies to shift their equipment investment to the fourth quarter of 2017, so as to deduct new equipment investment at the old 35 percent

Read More »

A Very Erroneous Chart in the Economic Report of the President

June 4, 2019

Menzie Chinn has been reading the latest Economic Report of the President and finds a very erroneous and misleading chart, which is figure 1-6 from this this document (see page 45), which states:

Equipment investment, in particular, exhibited a pronounced spike in the fourth quarter of 2017, as both the House and Senate versions of the TCJA bill, which were respectively introduced on November 2 and November 9, stipulated that full expensing for new equipment investment would be retroactive to September 2017. This created a strong financial incentive for companies to shift their equipment investment to the fourth quarter of 2017, so as to deduct new equipment investment at the old 35 percent statutory corporate income tax rate. After the initial spike in the rate of growth in fixed

Read More »

A Tariff Laffer Curve?

June 3, 2019

A Tariff Laffer Curve?

Douglas Irwin is a very good economist. Let’s highlight his Historical Perspectives on U.S. Trade Policy:
The Civil War marked the beginning of a long period of high U.S. tariffs. These tariffs served the dual purpose of raising revenue for the federal government and keeping out foreign goods, ostensibly for the protection of U.S. labor and business. After the war, tariffs (which generated roughly half of government revenue) remained high to service the enormous debt burden that resulted from the war. Yet by the mid-1880s a curious problem had arisen: though much of the debt had been paid off, federal revenues were outstripping expenditures by as much as 50 percent. Republican and Democratic politicians agreed that the fiscal

Read More »

A Tariff Laffer Curve?

June 2, 2019

Douglas Irwin is a very good economist. Let’s highlight his Historical Perspectives on U.S. Trade Policy:

The Civil War marked the beginning of a long period of high U.S. tariffs. These tariffs served the dual purpose of raising revenue for the federal government and keeping out foreign goods, ostensibly for the protection of U.S. labor and business. After the war, tariffs (which generated roughly half of government revenue) remained high to service the enormous debt burden that resulted from the war. Yet by the mid-1880s a curious problem had arisen: though much of the debt had been paid off, federal revenues were outstripping expenditures by as much as 50 percent. Republican and Democratic politicians agreed that the fiscal surplus should be reduced, but they proposed exactly the

Read More »

Art Laffer is Not an Economist

June 2, 2019

Art Laffer is Not an Economist
 Can The Hill be more wrong?

President Trump will award the Presidential Medal of Freedom, the nation’s highest civilian honor, to economist Arthur Laffer, the White House announced Friday. The president will honor Laffer on June 19 for his contributions to economic policy. The White House described Laffer as “one of the most influential economists in American history” in announcing the award.
OK the Idiot-in-Chief did say that but repeat after me – Art Laffer is not an economist. Why did Trump debase the Presidential Medal of Freedom and the entire economics profession?
Laffer co-wrote a book published last year titled “Trumponomics: Inside the America First Plan to Revive Our Economy.” His co-author was Stephen Moore, who

Read More »

Art Laffer is Not an Economist

June 2, 2019

Can The Hill be more wrong?

President Trump will award the Presidential Medal of Freedom, the nation’s highest civilian honor, to economist Arthur Laffer, the White House announced Friday. The president will honor Laffer on June 19 for his contributions to economic policy. The White House described Laffer as "one of the most influential economists in American history" in announcing the award.

OK the Idiot-in-Chief did say that but repeat after me – Art Laffer is not an economist. Why did Trump debase the Presidential Medal of Freedom and the entire economics profession?

Laffer co-wrote a book published last year titled "Trumponomics: Inside the America First Plan to Revive Our Economy." His co-author was Stephen Moore, who earlier this year was nominated to serve on the Federal Reserve

Read More »

Trump’s Latest Mexican Tariff Tirade Irks Senator Grassley

June 1, 2019

Trump’s Latest Mexican Tariff Tirade Irks Senator Grassley

Senator Grassley rebukes the latest idiocy from the White House:
President Trump dropped a trade war bomb on Thursday when he announced his intent to put in place new and harsh tariffs on goods from Mexico until the “illegal Immigration problem is remedied.” And among the many worried, negative reactions was one from Senate Finance Committee Chair Chuck Grassley, in a strongly worded statement. “Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent,” the statement begins. “Following through on this threat would seriously jeopardize passage USMCA, a central campaign pledge of President Trump’s and what could be a

Read More »

Trump’s Latest Mexican Tariff Tirade Irks Senator Grassley

May 31, 2019

Senator Grassley rebukes the latest idiocy from the White House:

President Trump dropped a trade war bomb on Thursday when he announced his intent to put in place new and harsh tariffs on goods from Mexico until the “illegal Immigration problem is remedied.” And among the many worried, negative reactions was one from Senate Finance Committee Chair Chuck Grassley, in a strongly worded statement. “Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent,” the statement begins. “Following through on this threat would seriously jeopardize passage USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country.” Putting this in the context of harming Trump’s own signature

Read More »

Conservative Economists Discover the Baumol Cost Disease

May 29, 2019

Conservative Economists Discover the Baumol Cost Disease

A little over a year ago Mark Perry wrote this nonsense:
The chart above (thanks to Olivier Ballou) is an update of a chart we produced last year about this time, and shows the percent changes since January 1997 in the prices of selected consumer goods and services, along with the increase in average hourly earnings in this version … Blue lines = prices subject to free market forces. Red lines = prices subject to regulatory capture by government. Food and drink is debatable either way. Conclusion: remind me why socialism is so great again.
To which I reminded him of the Baumol cost disease and followed up with this. It is good to see that Alex Tabarrok has been thinking about this issue as has John

Read More »

Conservative Economists Discover the Baumol Cost Disease

May 28, 2019

A little over a year ago Mark Perry wrote this nonsense:

The chart above (thanks to Olivier Ballou) is an update of a chart we produced last year about this time, and shows the percent changes since January 1997 in the prices of selected consumer goods and services, along with the increase in average hourly earnings in this version … Blue lines = prices subject to free market forces. Red lines = prices subject to regulatory capture by government. Food and drink is debatable either way. Conclusion: remind me why socialism is so great again.

To which I reminded him of the Baumol cost disease and followed up with this. It is good to see that Alex Tabarrok has been thinking about this issue as has John Cochrane. Read their posts as there is a lot of great discussion but permit me to cite

Read More »

Trump Claims Obstruction of Justice is an Official Duty of the White House

May 21, 2019

Trump Claims Obstruction of Justice is an Official Duty of the White House

Tierney Sneed reports on Trump’s latest obstruction of justice:
The Justice Department on Monday issued a legal opinion claiming that Congress could not compel former White House Counsel Don McGahn to testify about special counsel Robert Mueller’s report. The opinion was released not long after reports that the White House was planning to instruct McGahn to not comply with a House subpoena that he testify at a Judiciary Committee hearing Tuesday.
The legal opinion can be found here and states in part:
Congress may not constitutionally compel the President’s senior advisors to testify about their official duties … This testimonial immunity is rooted in the constitutional separation

Read More »

Trump Claims Obstruction of Justice is an Official Duty of the White House

May 20, 2019

Tierney Sneed reports on Trump’s latest obstruction of justice:

The Justice Department on Monday issued a legal opinion claiming that Congress could not compel former White House Counsel Don McGahn to testify about special counsel Robert Mueller’s report. The opinion was released not long after reports that the White House was planning to instruct McGahn to not comply with a House subpoena that he testify at a Judiciary Committee hearing Tuesday.

The legal opinion can be found here and states in part:

Congress may not constitutionally compel the President’s senior advisors to testify about their official duties … This testimonial immunity is rooted in the constitutional separation of powers and derives from the President’s independence from Congress.

What an incredibly arrogant

Read More »

Panetta and Trump: Who are You Calling Chumps?

April 28, 2019

Panetta and Trump: Who are You Calling Chumps?

Leon Panetta:
Trump treats Americans like we’re chumps
Check out the entire interview as it was excellent. But I had to look up this old fashion word:
a person who is easily tricked : a stupid or foolish person
OK – Trump supporters are easily tricked. But Trump wants to pretend he is a young vigorous man! Chris Matthews did talk about young people who are more likely to check out Urban Dictionary than the old fashion Merriam-Webster dictionary:
Someone who does not understand the basics of life on earth. Confused easily.
Actually this is the perfect description for Trump supporters. There are more definitions at Urban Dictionary that I would submit also apply!

Read More »