On the Record | Clinton’s Pledge on Debt Emerges as a Risible Claim

Please see my latest wire for The New York Sun, ‘Clinton’s Pledge on Debt Emerges as a Risible Claim’:

A risible headline comes courtesy of Hillary Clinton. “I am not going to add a penny to the national debt,” she promises. Raucous readers are permitted a moment to compose themselves.

Let’s be generous and take the former secretary of state at her word. Seriously. How does she plan to pay for the largesse of her presidential platform, be it infrastructure and research spending, enriching ObamaCare, subsidizing college — among other emoluments to its base?

Vote-buying is an art form among Democrats, who no longer camouflage the contours of their platform, summarized as any number of “soak the rich” vendettas, targeted through income, capital gains, corporate, or inheritance tax hikes. “We’re going to go where the money is,” Mrs. Clinton admits in a restatement of what is called “Sutton’s law,” after Willie “The Actor” Sutton. “We’re going to make the wealthy pay their fair share.”

Without doubt, a cheer erupts from Mrs. Clinton’s constituency, exulting over their supremacy over “the other,” ignorant that no one escapes the consequences of tax increases, the poor and middle class least of all. Revenge is a dish best served as cold comeuppance.

Read more . . .

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My thanks to editor Seth Lipsky of The New York Sun.

On the Record | British Tribune of Trade Could Steal the March on Trump’s Protectionism

Please see my latest wire for The New York Sun, ‘British Tribune of Trade Could Steal the March on Trump’s Protectionism’:

Britain after Brexit is wasting no time announcing to the trading world it is open for business. Minister of International Trade Liam Fox speaks of free trade with an optimism that must inspire envy in America’s market conservatives. Who can imagine government praising the virtues of free trade?

Economic growth, Mr. Fox asserts, is supported by three pillars of market freedom. One is liberty of trade, unshackled from state interference, since “the idea that governments should restrict the right of individuals to exchange their hard work for goods and services at an agreed price in an open market is one of the gravest infringements of personal liberty.”

Two is entrepreneurship, where “competition leads to innovation” that in turn “powers progress.” Three is competitive advantage, whereby markets “specialise in the production of goods where they have the greatest efficiency.”

Read more . . .

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My thanks to editor Seth Lipsky of The New York Sun whose encouragement acts as a necessary inducement to write.

On the Record | Let the States Roar

Please see my latest post for the Quarterly Review, ‘Let the States Roar’:

Notice is given from its ‘Constitutional Affairs’ department that ‘The New York Sun . . . opposes a balanced budget amendment.’

The justification cannot be that The Sun favours deficit spending, for the broadsheet prides itself as a tribune for limited government, fiscal probity, and sound money — grounded on the Gold Standard.

An awareness of the speed of unforeseen circumstances is one likely scenario for the editorial stance: allowing for contingency language written into a balanced budget amendment to take into account war or domestic necessity requiring its temporary suspension, The Sun may reason that even such foresight would frustrate government efficacy.

This observer can only speculate. But one germane objection to a constitutionally mandated balanced budget arises in relation to criticism of the supply-side economic revolution of the 1980s. While true that lowering high marginal tax rates can increase government revenues — the famous Laffer Curve axiom — such tax reform itself is not conclusive of prudent government policy. No responsible tax proposal comes without its corollaries: limited government and budgetary restraint.

Read more . . .

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My thanks to editor Dr Leslie Jones of the Quarterly Review; and my appreciation to Foundation for Economic Education president, Lawrence Reed, for his assistance to me in framing America’s indebtedness.

On the Record | Trump Rallies Entrepreneurial Spirit to Restore the American Dream

A golden-haired hero arrived in Toledo, Ohio, Wednesday last to rescue the American Dream. Donald J. Trump is its paladin: “We’re going to have this economy work again for you.”

The spirit that shook thirteen colonies to independence and catapulted a nation to world-power status a mere century later will rise again. Anæmic growth and stagnant employment will come to an end, he promised, by unleashing the competitive initiative held in check by government red tape.

Please see my latest posting for the American Thinker, ‘Rallying the entrepreneurial spirit’:

The guardians of economic orthodoxy took issue with Trump from the beginning, whether it was his tariff threat against foreign imports or his promise to penalize manufacturers who moved industries out of country. Classical economists, from Smith to Ricardo to Mill and beyond, had demonstrated that Western civilization was built upon the foundations of division of labor and the law of comparative advantage. How did Trump imagine he could “make America great again” when he flouted the free trade principles responsible for said greatness?

Over the summer Trump redeemed himself. He focused on currency manipulation as a key component of unfair foreign competition -- hand-in-hand with incompetent American trade negotiators -- while taking aim at high taxes, regulatory burdens, and Federal Reserve chicanery among the factors contributing to President Obama and the Democrat Party’s “false economy.”

“The contrast between the presidential contenders could not be starker,” writes Trump economic advisor Lawrence Kudlow. “Mr. Trump has an economic-recovery-and-prosperity plan. Mrs. Clinton has an austerity-recession plan.”

Read more . . .

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My thanks to the editors at the American Thinker.

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With the arrival of the autumnal equinox, it’s that time of year again to recommend the quintessential fall film, The Trouble with Harry.

Starring John Forsythe and Shirley MacLaine, Edmund Gwenn and Mildred Natwick, with a young Jerry Mathers, director Alfred Hitchcock set this 1955 classic in a Vermont countryside bursting with a riot of colour.

Part mystery, part romantic comedy, this film is an excellent way to welcome the arrival of autumn — when the air is crisp, the leaves turn, and gilded sunlight throws long shadows, you’re sure to be humming Bernard Hermann’s wonderful score in anticipation.

(Trailer below to whet your interest; once hooked, enjoy this complete YouTube video of The Trouble with Harry.)

On the Record | Donald Trump addresses America’s Debt

Please see my latest post for the Quarterly Review, ‘Donald Trump addresses America’s Debt’:

‘The Open Conspiracy.’ That is what Henry Hazlitt, the renowned New York journalist, called the political effort to ‘monetise the debt’ by inflating the currency so that U.S. government debts incurred to-day will cost less to pay to-morrow; or, as is the case, years into the future — if ever.

But in an interview with CNBC on 5^th May, Donald Trump, presumptive Republican presidential candidate, took a swing at the conspiracy by matter-of-factly stating that, as President, he would seek to restructure the payment of U.S. Treasury bonds at lower returns.

Trump then cracked the conspiracy wide open four days later, acknowledging America’s — and all countries with fiat money — dirty little secret: ‘you never have to default because you print the money’.

And, in the process, Trump unleashed yet more political opprobrium upon his head.

Read more…

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My thanks to Dr Leslie Jones of the Quarterly Review; and my appreciation to Professor Steven Kates of RMIT University for guidance on calculating inflation.

On the Record | Government Greed Axes the Golden Goose

Please see my latest post for the Quarterly Review, ‘Government Greed Axes the Golden Goose’:

President Barack Obama mounted the bully pulpit again last month, to decry the practice of ‘tax inversion’ and those corporations with the effrontery to believe in private property and the profit motive, thus escaping exorbitant tax bills by moving operations out of the United States for the welcoming low-tax jurisdictions of foreign lands.

According to an AP News report:

“Obama called it ‘one of the most insidious tax loopholes out there’ because it shortchanges the country. He said less tax revenue means the government can’t fully spend on schools, transportation networks and other things to keep the economy strong. He said the practice also hurts middle-class Americans because ‘that lost revenue has to be made up somewhere.’”

Oh, dear! Where does one begin to enumerate President Obama’s recurring penchant for economic (and constitutional) illiteracy?

Read more…

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My thanks to Dr Leslie Jones of the Quarterly Review.

Albany pranked New York in cruel April Fools’ Day joke

New Yorkers awoke on the first day of April with news that, among those budgetary items Governor Andrew Cuomo tentatively finalised with the legislature, was an increase in the hourly minimum wage (staggered across industries and jurisdictions over the next six years), from $9 to $15 — the cruellest of April Fools’ Day jokes, with consequences lasting more than a day and afflicting more than the targeted beneficiaries.

Governor Cuomo, speaking of the plan at a January rally, took aim at critics by a populist appeal. ‘We are going to do it for the State of New York, we are going to lead the way for this nation, we are going to restore honor and dignity and respect to the workers, we are going to say to this country, “You can do very well on the top level and you can also rise up the bottom level.”’

As Cuomo doubtless knows but heeds not, the arguments against the minimum wage are legion: that it hurts the working poor, that it penalises workers with low skills, and that it bars young job-seekers (particularly the marginalised) from gaining valuable experience and work-habits — criticisms that are all well-rehearsed, but no less true.

Yet in laying out the case for the minimum wage, Governor Cuomo raised issues that are further proof that state intervention into markets only compounds problems the political process purported to fix. He is not alone, for it must be a prerequisite of political office to misjudge the organic nature of market operations.

The market is a clearinghouse, with individuals offering each other what they have — be it goods and services — for what they need. Barter was the modus operandi at the beginning; with various media being introduced in time to facilitate transactions. But in its essence, exchange means exchange. You can only buy if you have something to sell and cannot sell if you price yourself out of the market.

But through its economic interventions, the State has priced the poor out of market, and in many cases (such as the minimum wage), have left them nothing to exchange (e.g., their labour). The only thing left they have to barter is their vote, and in this exchange, between the individual and the political process, the parties are unevenly matched.

‘The minimum wage doesn’t even work numerically in this State,’ bewailed the Governor. ‘This is below a subsistence level. You can’t make it on a minimum wage job. You need two, three, four minimum wage jobs to actually make it, and that’s not what the minimum wage was all about.’

However, if the market were allowed free scope, buyers and sellers would have to reach agreement, or else neither would be able to exchange. What impediments stand in their way?

At January’s announcement, Cuomo pointed the finger at businesses that ‘make money on the minimum wage’, noting that ‘McDonalds pays a minimum wage, but at the minimum wage in this State, you are still below the poverty level. So this State then, with tax dollars, gives you a welfare payment, food stamp payment, housing assistance. When you look at it at the end of the day, McDonalds pays the minimum wage [$18,000] and the people of the State of New York pay on average $6,800 more.’

With the availability of State aid and the get-out-of-purdah free pass of a legislated minimum wage, who can blame McDonalds or any other industry from maximising its profits, given the perverse government incentives?

‘I am getting out of the hamburger business,’ the Governor promised; but who put State officials into the free market exchange in the first place?

Moreover, as a result of this minimum wage legislation, the New York Post reported, ‘Wages will be hiked to the new minimum for 2.3 million workers in New York, a move Cuomo says will infuse $15.7 billion into the state economy’ — with nary a second thought about the origins of this bounty nor Albany’s ‘take’ thereof. Such an echt bureaucratic attitude from the State capital.

‘If you had taken the minimum wage in 1970,’ Cuomo observed nonchalantly at the rally, ‘and you had indexed it to inflation, you know what it would be today? Fifteen dollars an hour. That’s the fair wage for a minimum wage in the State of New York.’

But as American fiat greenbacks are nothing more than a medium of exchange, without any connexion to real worth — such as the gold standard — government-induced money inflation does not add to America’s net worth but only benefits those crony capitalists with government ties and hurts those of low incomes hit by inexorable price increases.

As negotiations had neared completion, Cuomo told waiting reporters, ‘I believe that this is the best plan the State has produced in decades.’ Nonsense. This April 1^st budget is only the latest example of government having a good laugh at citizens’ expense.

On the Record | Mill Power

Please see my latest post for the Quarterly Review, ‘Mill Power’:

On the campaign stump, Donald Trump’s visceral answer to manufacturing decline has been called a self-defeating return to the processes of primitive economics. But Trump’s route to powering America’s revival does lead through a mill — John Stuart Mill.

Trump’s economic prescription to ‘Make America Great Again’ by imposing tariff walls to foreign trade has been lampooned by mainstream economists as equating the Great Depression hysteria that gave rise to the Smoot-Hawley tariff act, which saw affected nations impose retaliatory trade restrictions.

Many of these same economists prefer their own Depression-era madness, in the form of Keynesian stimulus that argues that downturns are caused by a lack of aggregate demand, requiring government spending to prime the pump and restore consumerism.

Long before Lord Keynes, however, nineteenth-century classical economists had debunked this fallacy, notably J. S. Mill.

Read more…

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My thanks to Dr Leslie Jones of the Quarterly Review and to Professor Steven Kates of RMIT University, who introduced me to the classical economics of J.B. Say and J.S. Mill, and to Ricardo’s succinct refutation of Malthus: ‘Men err in their productions, there is no deficiency of demand.’