Tag Archives: Taxes/regulation

A Bernie Sanders Narrative for Seniors What follows is some unsolicited advice for the Sanders campaign. Politico has an important piece on the downside of the extraordinary age bias in Sanders’ support.  Like a teeter totter, the large advantage Sanders enjoys among younger voters is counterbalanced by his dismal showing among the older crowd.  The article reviews voting breakdowns from the 2016 campaign and current poll results, and it shows that...

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...

Tariffs and Monetary Policy: Moral Hazard and Rent Seeking President Trump’s threat to impose tariffs on Mexico over immigration has pushed Federal Reserve Chair Jay Powell to say that if the tariffs lead to economic growth slowing, the Fed will cut interest rates.  While the bump may be about to end, this announcement was followed by a  solid global surge of stock markets on June 4 followed by smaller increases the next day.  This sets up a moral...

The sources of the next recession While we are waiting for the ISM May manufacturing survey and construction spending data to be released later this morning, both of which will give us important clues to Friday’s jobs report, let me write down some thoughts on the nerdy question I ruminated about this weekend: what is the most likely source of the next recession? I should start by noting that I remain on “recession watch” for later this year, as in, a...

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)...

Kenneth Thomas (an AB contributor) was quoted April 7  in the Journal a second time on the general question of how to solve the problem of subsidy bidding wars.  Unfortunately it is behind a paywall…but worth pointing to…  WSJ.COM Opinion | Pass a Law to Combat Rent-Seeking Congress could invoke the Commerce Clause to limit destructive competition over corporate subsidies. ...

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....

Does anyone know why coal production is falling out of bed?  It is down some 40% from its August level. But coal employment is still near its’ recent peak, which implies that productivity is horrible. I suspect the problem is exports to China. Maybe someone needs to ask Trump about this.

Will China Play The Rare Earth Card In The Trade War? The rumor that China might play its “rare earth card” was the rumor today that helped push down both stock and oil markets according to a variety of reports.  The trigger for this seems to have been a visit on May 26 by China’s president, Xi  Jinping, to a rare earth facility, along with some rumbling statements associated with that visit.  They may not do it, but the possibility of blocking exports...

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 =...