The Angry Bear

No, We Won’t See a Torrent of Investment From the Tax Bill One of the arguments that Republicans are using to support their tax bill is that it will unleash investment.  The data says otherwise.  Currently, most US economic sectors are operating far below maximum capacity utilization. Let’s start with manufacturing: Figure 1 The top chart shows the CU rate for manufacturing while the bottom two charts break the data down into durable and non-durable...

Ernie Tedeschi as linked by Paul Krugman points to an interesting author. The math is in follow up post.: Many parents face higher taxes under TCJA, even if Congress makes its credits permanent This quick post looks at the effects of the Tax Cut and Jobs Act (TCJA, the House GOP’s proposed tax plan introduced last week), but (selfishly) I focus on a specific segment of the population: families with children under 18. It turns out that parents do far...

ARAMCO CEO Is Delusional Financial Times reported yesterday that Amin Nasser, the CEO of the Arabian American Oil Company (ARAMCO, currently 100% owned by the Saudi government, although originally founded by four former US oil company majors), has declared that investors should feel pleased that Crown Prince Muhammed bin Salman has arrested and purged over 200 Saudi princes, government officials, and private businessmen.  This is because this was...

The NY Times has an op ed entitled Can My Children Be Friends with White People?. (Dan here …Link corrected) I think this is the most interesting excerpt: …I will teach my boys to have profound doubts that friendship with white people is possible. When they ask, I will teach my sons that their beautiful hue is a fault line. Spare me the platitudes of how we are all the same on the inside. I first have to keep my boys safe, and so I will teach them before...

I’ve noted before I have a bit of an interest in Baltimore because my wife originates from there (despite having convinced herself that she’s from the Los Angeles area). So I noticed this story: An alarming discovery coming out of City Schools. Project Baltimore analyzed 2017 state testing data and found one-third of High Schools in Baltimore, last year, had zero students proficient in math. Contrast that with this: The Baltimore City Public School System...

The post below is silly. It is based on bending over backwards to take silly arguments for the GOP tax plan seriously. This older post is the one with some relevance to the real world. The silly argument is that lower taxes on profits imply a lower cost of capital for firms. Investors will demand the same return net of taxes and so demand less from firms if the IRS takes less. The story continues that this lower cost of investing will cause firms to...

Paul Krugman has been explaining (very slowly and clearly) that if the US attracts foreign investment by cutting taxes on profits, then it will have to pay the foreign investors. The Tax Foundation appears not to have noticed that loans are not gifts. First he quoted Stephen Rosenthal’s observation that the direct effect of cutting taxes on corporate profits is to give roughly 700 billion over 10 years to foreigners who own shares of US corporations....

The PayGo law forbids bills which increase the national debt. Unless it is repealed or waived, the Republican tax cuts would cause automatic sequestration of, among other funds $ 25 billion from Medicare. This is an excellent as usual Vox Explainer by Tara Golshan It all comes down to the “pay-as-you-go,” or PAYGO, rule — a 2010 law that says all passed legislation cannot collectively increase the estimated national debt. In other words, if Republicans...

We have virtually reached the singularity when virtual reality supplants reality. A photo tweeted by the Russian Ministry of Defense Tuesday as “irrefutable” proof that the United States has allied with the Islamic State in Iraq and Syria turned out to be from a video game. Do android phones dream of electoral sheeple ? What is reality and is there an app for that ? Russian Ministry of Defence: “irrefutable evidence that there is no struggle against...