Would you like to know how many people have visited this page? Or how reputable the author is? Simply
sign up for a Advocate premium membership and you'll automatically see this data for every member page. Plus a lot more, too.
I have 6 fans: Become a Fan. You'll get emails whenever I post articles on OpEdNews
Seymour Patterson received a Ph.D. in economics from the University of Oklahoma in 1980. He has taught courses and done research in international economics and economic development. He has been the recipient of two Fulbright awards--the first in Botswana in 1991 and the most recent in Ethiopia in 2009. He was on the Truman State University faculty until 2008.
(3 comments) SHARE Saturday, June 8, 2013 The Burden of Education on Students Grows but It Shouldn't
Education as a public good is explored. The $1.1 trillion student debt is a burden hard to repay. Student loan interest rate boubling to 6.8 percent creates a disincentive for students to get an education. The U.S. ranks below many European countries in math and science scores, and some of these countries have lower education costs and no tuitions. Higher education should be affordable to everyone given its public nature.
(4 comments) SHARE Wednesday, April 2, 2014 Fiscal-Policy Obstruction to Economic Recovery
Fiscal policy has a positive effect on economic growth and is needed as a way to escape from a recession. The Fed expanded the money supply to make up for political restraints put on the economic-stimulus effort. Political considerations have trumped pro-growth economic policies in this post-recession environment.
(7 comments) SHARE Sunday, March 18, 2012 Is Growing Ethnic Diversity a bad thing?
This article discusses the concerns about the change in the ethnic makeup of the U.S. by mid-century. Pat Buchanan paints a dreary portrait of America in his new book Suicide of a Superpower: Will America Survive to 2025. By assuming that "all human capital is no created equal," he must conclude that what is coming is bad. I argue high income and the democratic form of government give hope for a bright U.S. future.
(7 comments) SHARE Tuesday, June 10, 2014 Minimum Wage, Unemployment Benefits, and Income Inequality Connection
Income inequality is a problem addressed by Mr. Piketty and the Pope, both of whom were criticized for their effort. Ways to reduce the income gap are to be found in the minimum wage and unemployment benefits. A rise in the minimum wage and extension of unemployment benefits would marginally reduce the income inequality prevalent in this country and raise aggregate demand for goods and services.
(2 comments) SHARE Wednesday, January 15, 2014 On Income Inequality and Economic Growth
Three causes of inequality with negative impacts on economic growth are discussed. Income inequality increases when the top marginal tax rates are reduced, when there is persistent high unemployment, and when unions are weakened. Tax cuts widen the income gap between rich and poor. High unemployment depresses wages, so the gap between worker and CEO income widens. Weak unions can’t bargain for wages to match productivity.
(7 comments) SHARE Friday, November 9, 2012 Startups and small business create most new jobs
Big business rests on pedestals. When they flounder their CEOs get generous severance payouts. The myth that tax cuts on big business and top marginal taxpayers is the path to growth has exploded. More fruitful is a shift in focus to more small business friendly policies, as small business is the engine of job creation. On the demand side, middle and low income tax cuts have empirical roots for economic growth.
(12 comments) SHARE Monday, June 11, 2012 Wisconsin Recall Results: Why Some People Don't Vote Their Self-Interest
This article deals with the inconsistencies of votes cast be voters against their own self interest. It is gemaine to what took place just recently in Wisconsin and addresses the wider issue of inconsistencies in terms of gaps between factual events and fictional ones as voters perceive them.
(7 comments) SHARE Sunday, October 5, 2014 U.S. Should Emulate Free-Tuition Germany
Germany returned to tuition-free education. However, the trend in the US has been to make students pay for their education, which resulted in a student loan debt of $1.2 trillion. US spent $6 trillion on the wars in Iraq and Afghanistan. Yet, the returns to education are greater than the returns to war spending, which is needed for national security. But education must trump war spending.
(4 comments) SHARE Sunday, March 29, 2015 The Minimum Wage and Economic Growth
Both sides on the minimum wage debate may be right for an increase can cause more unemployment, but also higher spending. Find the net effect of the minimum wage by calculating the sensitivity of wages on unemployment. A higher minimum wage can also mitigate the growing US inequality gap. The minimum wage and the average wage can keep wage costs down, which is good for business but bad for workers.
(3 comments) SHARE Thursday, May 14, 2015 Acting Against Your Own Best Interest
People vote against their own best self-interest. Republicans tell them they are going to cut their benefits, and cut taxes for the rich. So they lose government jobs, teachers are laid off; the infrastructure, Medicaid, Medicare, and Social Security are cut. They voters are worse off in Wisconsin, New Jersey, Florida, Louisiana, Kansas, and Texas, yet the same people are returned to office time and time again.
(1 comments) SHARE Monday, November 12, 2012 The Community Organizer versus the Bain Capital Manager
Pres. Obama won re-election with a better ground game and understanding of the political landscape than the challenger Mitt Romney. The American voter is insightful and punishes those who disregard some ethnic groups, and disrespect women's right to control their own bodies. They don't take too kindly to voter-suppression efforts. The campaign organizer Obama did a better job of managing his campaign than the manager Mitt.
(3 comments) SHARE Friday, July 18, 2014 Positive effects of higher minimum wages
There is evidence that raising the minimum wages does not hurt employment. Congress will not raise the federal minimum wage to $10.10 but some states, as some businesses, are raising their minimum wages. States that have raised the minimum wages have higher employment. Business that pay more than the minimum wage benefit from lower employment turnover and greater productivity.
(7 comments) SHARE Friday, July 17, 2015 Privately Owned Students
Rubio wants to make students business investments. This is a solution to the trillion-dollar student debt loan problem. But it would lead to complications: in some states there is debtors prisons, so if the student can't repay the loan he could go to jail. A better solution to this problem is debt forgiveness. Furthermore, the debt increases income inequality and reduces GDP growth. Free education would reduce the burden of th
(3 comments) SHARE Thursday, September 4, 2014 Is Government Welfare Only Good for the Rich?
The rich and the poor are different. Many Americans have no qualms about tax breaks and subsidies for the rich, which they think spur investment and jobs. Many also think welfare causes bad behavior in the poor--which assumes that the rich are good by nature and the poor innately bad. Today, the rich get a trillion dollars in welfare, the same as the poor, but it's the poor whose benefits we want to cut.
(6 comments) SHARE Wednesday, October 28, 2015 Stiglitz on Inequality: "The Great Divide"
The Great Divide's main theme is income inequality: its causes and consequences. One cause is the structure of the tax system, while another is the ability of the 1 percent to get the government it wants abetted by rulings of SCOTUS. Inequality reduces aggregate demand, slows economic growth and hurts everyone, including the 1 percent.
(5 comments) SHARE Thursday, April 30, 2015 The TPP Dispute
The President believes TPP is good for America. Sen. Warren begs to differ. The Congress is for fast track on this agreement, which conceals its contents from them and Americans. TPP will reduce wages in the U.S. as companies outsource services and move their operations offshore. TPP could reduce the demand for U.S. labor and raise company profits. This could exacerbate the income inequality gap in the U.S.
(4 comments) SHARE Friday, November 30, 2012 Conspiracies and theories that didn't matter because they're flawed
In the political arena, some conspiracies and theories are attempts to assign nefarious motives for the actions of takers. The infrastructure of the arguments is lies and exaggerations. And they have as their main aim the destruction of political opponents. Americans did not buy into these arguments in re-electing President Obama.
(5 comments) SHARE Thursday, July 25, 2013 Not having Health Insurance Coverage is Risky Business
Many Americans have no health insurance. But because premiums are expensive, many Americans elect not to have insurance. Obamacare is an attempt to address this problem, however, the House voted 37 times to repeal it. Already, more people have access to insurance, premiums are cut in half, seniors on prescription drugs have saved $6.3 billion, and $1.6 billion has been rebated to policyholders.
(1 comments) SHARE Sunday, July 31, 2016 Economic Nationalism is Not the Answer
Economic nationalism is gaining momentum in American politics become of the perception that trade agreements with international partners have worked against us. Free trade is different from outsourcing or foreign direct investments. Inward-looking policies and austerity practices might defeat rather than address the concerns of American voters.
(3 comments) SHARE Saturday, March 9, 2013 Interest Rates Policy Ineffectiveness Debacle
This piece deals with the fact that interest rates are low--the FED's attempt to deal with slow growth. So the government can borrow at very low rates. The debt is of concern (even that portion held by the Chinese). However, must of the debt is held by Americans. Further, poor people are blamed for the financial recession of 2007, but Wall Street got bailed out while millions of households around the country got foreclosed.
(1 comments) SHARE Saturday, July 13, 2013 Some People Don't Like Science, but Science Is Good for Us
Science is both a source of discovery and harm. In a closed system like the earth, entropy rises. The production of goods and services also produces waste. But the damage production does to the air, the ozone, water, and the voice can be redressed by science.
(8 comments) SHARE Wednesday, May 16, 2018 Science skepticism runs amok
Science writ large is based on evidence whether it's about the cosmos or about economics. Ridding government parlance of science belies this truth with consequential impact. Propose tariffs might have the same negative effect on world trade as the 1930s Smoot-Hawley Tariff Act had.
(3 comments) SHARE Tuesday, May 15, 2012 Marginal Tax Rates and Economic Performance
Marginal tax rate cuts are hypothesized to increase economic output. However, there is some evidence that suggest that marginal tax rates and economic performance are positively correlated. If rich and poor people have different propensities to consume, raising taxes on the rich would not reduce consumption and might help the national deficit. So it's hard to justify Grover Norquist's intransigence on hiking taxes on the rich.
(6 comments) SHARE Monday, April 17, 2017 The ACA Lives: fix it not kill it
ACA is still alive despite all the efforts to repeal it and use the savings for tax cuts for the rich. It has insured millions of Americans. Repeal could lead to people dying. A fix should target the problem directly as subsidies do. But the individual mandate insures more people. Block grants to states will not accomplish the same thing.
(5 comments) SHARE Saturday, January 6, 2018 Trump tax cuts and the economy
The Trump tax cuts lower tax rates for the people at the top and for corporations. The administration hopes the economy will grow 3 percent and corporations will repatriate trillions of dollars held abroad. The repatriation in earnings will lead to more jobs. It's late to raise taxes to over 50 percent as a strategy for incentivizing corporations to pay higher wages and to invest in their companies.
(2 comments) SHARE Tuesday, August 15, 2017 The Economy has been Doing Well
In the past eight year, the U.S. economy has been growing and the stock market rising. Restricting immigration could raise wages; but a fence costly. The wall will cost billions. Tax cuts can stimulate the economy. Repealing the ACA isn't the way to pay for it. Decreasing regulations might increase business hiring. But repealing Dodd-Frank might cause another great recession.
(1 comments) SHARE Thursday, December 27, 2012 Throwing Social Security Beneficiaries Under the Bus
Obama tries to renege on no compromise on entitlement. He should never give in to people who want him to fail. The deficit is not related to entitlement benefits because payroll taxes are paid for Social Security and Medicare. The chained CPI for COLA makes the middle class and poor bear the brunt to fix the deficit. The answer to the economy is growth.
(4 comments) SHARE Saturday, October 14, 2017 On Corporate Tax Reduction
Tax reform to repatriate $2.5 trillion held by corporations abroad fails to recognize that corporations pay 18 percent on average in taxes. Reducing the rate to 20 percent is still two percentage points over the average. That difference might not be enough to change current behavior. Higher tax rates give businesses the binary choice of paying more to the government or raising wages and spending on capital investment.
(1 comments) SHARE Sunday, July 29, 2012 Incentivizing Economic Growth
This article deals with the difficulty the Federal Reserve Bank faces trying to stimulate economic growth through quantitative easing of the money supply. But firms have profit maximization as their goal. On the other hand, the two political parties have different fiscal policy objectives--Democrats want to increase spending, while republicans want to cut spending. Ironically, both think recovery will follow from this.
(3 comments) SHARE Wednesday, October 9, 2013 Abrogating Responsibility To Make the Economy Work Is Inexcusable
Incentives are important. But there is no political will to grow the economy to bring down the deficit. Shutting down the government, or defunding or repealing Obamacare, is insanity. A better solution to the deficit problem is an excise tax on Wall Street. While some people believe in running the government like a business, they fail to note that businesses are mismanaged and fail all the time--e.g. Enron, WorldCom, and AIG.
(6 comments) SHARE Tuesday, November 24, 2015 End the Decade of Low Interest Rates
Ms. Yellen might raise interest rates in December. Retired people with interest bearing assets would benefit from this development. However, Wall Street and bankers have been the main beneficiaries of the protracted low interest rates. And there is an unfounded charge that President Obama will force Ms. Yellen to keep interest rates low until after the presidential elections. This charge ignores the independence of the Fed.
(4 comments) SHARE Thursday, December 22, 2016 The Voters Want Trump's Economic Plan
Trump (and Clinton) wanted to increase the rate of growth of the US economy and propose to do that through tax cuts. Trump expects a four percent growth rate by cutting rates on the rich. Hillary wanted to grow the middle class through tax cuts on the middle class, and a higher minimum wage, among other things.
(2 comments) SHARE Monday, October 8, 2012 The Debate on Tax Cuts: More Politics and Economics
Obama and Romney vie to cut taxes on Americans assuming tax cuts lead to economic growth. Tax cuts raise after tax income and buying power. But, the case for tax cuts is unclear--some plus in the short run, in the Kennedy and Reagan years; but not in the Clinton years--higher tax rates correlate with better economic growth. From 1913 to 2011 across the board tax cuts were less effective than targeted cuts of the same size.
(3 comments) SHARE Friday, November 7, 2014 Politicians and Duplicity
Politicians garner votes to stay in office, so they must be duplicitous. If they tell the truth, their jobs might be in jeopardy. Politicians and duplicity catalogues few examples of duplicity; Ukraine versus Georgia, Fast-and-Furious versus Wide Receiver, IRA, Benghazi, Ebola, and Guantanamo. In all these cases, the scandals depend on party affiliation; not the truth.
(4 comments) SHARE Monday, October 27, 2014 A failed experiment may go national after the November elections
Governor Brownback's economic experiment for Kansas has been a resounding failure. He cut government spending and taxes and expected that economic growth would follow. What followed was a shortfall in government receipts. The elections of November 2014 would elevate the Kansas experiment to the nation. If that were to happen, the prospect for the continued economic would be encouraging.
(1 comments) SHARE Wednesday, April 17, 2013 Don't tamper with social security Mr. President
It is a disappointment the president chose to include chained CPI in his budget. This makes him the first democratic president to do so. It is an opening for republicans to push for Ryan's voucher plan, which models Pinochet's failed privatized pension plan Chile. There are costs and benefits to any plan. But the advocates for privatization ignore the costs.
(5 comments) SHARE Friday, March 18, 2016 Trade Agreements versus Trade Liberalization
Free trade makes everyone better off because of comparative advantage. Agreements like NAFTA and TPP appear to be the realization of free trade arguments. However, U.S. companies move abroad to avoid environmental regulations and taxes; and to take advantage of lower wages in host countries. These good are then sold in the U.S. market. Wealthy businesspersons benefit but workers lose their jobs.
(1 comments) SHARE Friday, January 20, 2017 Government is not a business
Who should rule the country? Smart men? The Constitution says a person who is natural citizen, age 35, with 14 years of residency can be president. Being a businessman is no more qualifying than being a community organizer. Businesspersons are motivated by profit, but government is about maximizing the general welfare. And being a businessman does not guarantee success in government.
(14 comments) SHARE Monday, August 17, 2015 Trade and Trump
The yuan devaluation might have been motivated by China wanting to export its sluggish economy or the government's effort to include the yuan in the Special Drawing Rights basket. Mr. Trump says the devaluation hurts U.S. exports. He believes China and Mexico take advantage the U.S. with Ford's plans to build a $2.5 billion car plant in Mexico. Mexico gains jobs and investments and the US's expense.
(2 comments) SHARE Tuesday, August 30, 2016 Inversion, Investment and Economic Performance
Notion that US corporate tax rates are too high and thus discourage investment and economic growth. But many big US companies pay zero taxes. Proposals to lower the tax rate would change nothing--zero taxes trumps any positive tax rate. Fact, investment and income are positively correlated. Hence, more investment will be forthcoming when income growth.
(1 comments) SHARE Friday, July 6, 2012 Deficit, U.S. Default, and Economic Stimulus versus Austerity
This article deals with the dichotomy between the approaches of President Obama and Mitt Romney for dealing with the country's economic problems. Based on his policies to date, it is clear Obama thinks the problem facing the economy is low demand. Hence, the need for a stimulus. Mr. Romney has not clearly articulated any substantive policies but seems to prefer tax and spending cuts, to restore business confidence.
(2 comments) SHARE Wednesday, September 25, 2013 On Obamacare
ACA is going into effect soon. The Supreme Course ruled it is constitutional. ACA will make health care insurance available to millions of Americans without insurance. It will address physical health problems as well as lifestyle quality issues related to promoting good health. The possibility of the success of ACA seems to motivate opponents kill it now because it would be difficult to repeal a popular program later.
(4 comments) SHARE Wednesday, October 16, 2013 U.S. . . . Another Greece? Never!
The U.S. is not Greece and not likely to become Greece. It is bigger and its debt-to-income ratio is smaller. Greece tried austerity (imposed by the EU) and its debt-to-income ratio rose. That's not surprising--in fact, it was anticipated. The U.S. should push for growth through capital investment, human-capital investment, and tax incentives for U.S. businesses abroad to come back home.
(2 comments) SHARE Sunday, September 8, 2013 Labor continues to suffer in this recovery; but corporate profits soar
Over the years CEO compensation has been rising relative to worker compensation. The reasons include the weakness of unions, reductions in top marginal tax rates, failure to enforce antitrust laws, and a stagnant minimum wage. The difference between worker and CEO compensation is also the result of rewarding the latter with the productivity gains of the former.
(1 comments) SHARE Monday, November 7, 2016 The Brexit Effect
Brexit might have some implications for US/British trade. The drop in the value of the pound relative to the dollar makes British goods American tourists and importers. While Mr. Trump on the campaign trade appears to have a more inward-looking posture of trade, Hillary Clinton might have been more open to free trade before, but now she is opposed to TPP.
(1 comments) SHARE Wednesday, November 23, 2016 Trump and Economics
As president-elect of the US, Mr. Trump seems willing to growth the US economy following a Keynesian prescription: lower taxes and higher government spending. He might be able to carry through on this because Congress is controlled by members of his party. But he runs the risk of increasing the deficit (and the debt) without reducing income inequality.
(2 comments) SHARE Wednesday, May 1, 2013 Bad Results Follow Flawed Reasoning about the Debt-to-GDP Ratio
The case for austerity made by Harvard economists Reinhart and Rogoff in their paper "Growth in a Time of Debt" fell apart when graduate student Thomas Herndon discovered errors in their argument. Neoliberal thinking about deficits, as it applies to developing countries, Europe, and America, cannot demonstrate that austerity, Structural Adjustment Programs, or sequestration promote economic growth.
(4 comments) SHARE Thursday, March 1, 2012 Economic Recovery Conundrum
Since recessions reflect reductions in aggregate demand for goods and services, particular private household and business demand, it is counterintuitive to cut government spending to promote economic growth. Cutting government spending (by laying off government workers) to balance the budget at the state and local level will lower income and thereby government revenue leading to deficits--this cycle repeats.
(2 comments) SHARE Thursday, August 22, 2013 Does the Choice of a Fed Chairman Matter?
Larry Summers' resume both qualifies and disqualifies him for the job of chairman of the Federal Reserve Bank. Janet Yellen has real hands-on experience working at the Fed. But ultimately, it is President Obama's call and he will make that selection--and if his recent public support for Larry Summers is foreshadowing the president's selection, then it might be fair to say the choice has already been made.
(3 comments) SHARE Monday, July 6, 2015 Solving the Greek Problem
Creditors want Greece to pay up or default. If Greece leaves the euro, the country will have control of monetary policy again. It could devalue to drachma to increase exports and reduce imports. Greece does not need more austerity; it would benefit more from economic growth.
(7 comments) SHARE Monday, October 5, 2015 Cut, Cut, Cut, and More Cuts (Part II)
There is rush to cut government spending. Wisconsin's Gov. Walker, and Louisiana's Gov. Jindal are in that camp. They use as pretext that high deficits and debts are a drag on the economy. However, there is a greater nefarious motive for cuts--high debts and deficits give the government and members of Congress cover to cut, and eliminate or privatize government programs they disdain.
(2 comments) SHARE Saturday, May 25, 2013 No Union is an Island, Entire to Itself . . .
This piece deals with the potential consequences of the assault on unionism, and the resulting decline in union membership and wages. This was followed by a rise in profits. The rift between the profit recipients and wage earners has the potential of causing the emergence of political instability, which could split the country apart.
(2 comments) SHARE Thursday, March 23, 2017 Creating Labor Shortages: The Wall and NAFTA
The wall, whose cost varies considerable, will cause Mexico GDP to decline, although it will not bankrupt to country. NAFTA has fostered greater trade between the U.S. and Mexico, but has not led to a convergence of income between the two countries. The wall will create labor shortages and higher wages in the U.S. The U.S. economy is in good shape: its problem is distributional.
(2 comments) SHARE Tuesday, July 1, 2014 Free Tuition is the way to go: Pass A Students Emergency Loans Refinancing Act Already.
Congress failed to relieve student debt by adjusting the loan interest rate. The government makes a profit on student loans and it is reducing it share of the cost of higher education. Education is a public good and should be free to students. If the student load debt were forgiven, the ensuing spending would stimulate rapid economic growth.
(3 comments) SHARE Thursday, August 8, 2013 Strong Dollar might be Counterproductive to Economic Growth
Low interest rates are the currency of the day. They reflect the failed effort of the Fed to grow the economy. Business is awash with cash, and tax cuts would increase the supply of loanable funds, but both these things have not made the economy grow faster. The weak dollar has not help either. Obama wants to redouble his efforts to encourage faster economic growth through more government spending.
(2 comments) SHARE Monday, July 20, 2015 Starving the Beast
Reaganomics is about reducing the size of government, and cutting back on regulations, among other things. It has taken hold here and abroad. Starve-the-beast means tax cuts to justify spending cuts because of deficits. Starve-the-beast theory caught on due to the Vietnam War, the oil crises, and the Iran hostage crisis. President Reagan reduced top marginal tax rates to 28 from 70 percent in 1980. Note how well it's worked.
(1 comments) SHARE Wednesday, June 26, 2013 The Stock Market Jitters on Good News for Retirees!
Chairman Bernanke's optimism on the economy is examined here. Wall Street likes low tax rates, interest rates, and deficits. National saving equals private, government, and foreign saving. If the deficit rises, so will interest rates and crowd out investment. So our grandchildren will face higher taxes and have less capital. But higher interest rates are good for people whose main source of income is interest-earning assets.
(5 comments) SHARE Saturday, June 4, 2016 The National Debt is not a Monetary Problem
Mr. Trump has an easy solution to the huge U.S. debt--print money, raise interest rates, and buy back the debt at a discount. The Fed is an independent organization that changes the money supply based on economic conditions--not political ones. Without a congressional change in the Fed's mandate, Mr. Trump's debt solution scheme may not be doable.
(4 comments) SHARE Saturday, July 11, 2015 Greece Caves
Greece capitulated to creditors' demands for more austerity. The stock market celebrated. Austerity has led to more suicides and a rise in HIV and malaria. Privatization is hardly the solution. Many private companies do bad things and government bails them out. They have learned to socialize the costs and internalize the profits. Raising taxes and cutting spending is not the way to rescue the floundering Greek economy.
(2 comments) SHARE Wednesday, June 24, 2015 Something is Rotten in Europe
Greece and Kansas have deficit problems. Kansas wants to increase sales taxes and transition their state away from an income tax to a consumption tax. Greece wants more time from its lenders to resolve its debt problems, instead of cutting pensions. Leaving the EU could have serious problems for Europe. Sam Brownback wants to defund the judiciary if he cannot get what he wants.
(1 comments) SHARE Monday, December 15, 2014 The Disparity in Income Distribution Persists
Employers earn about 400 times what their workers make, as profit shares soar and wages stagnate. This implies that worker productivity is zero and explains some of the rising income inequality between the rich and the poor. Higher wages might lead to some unemployment, but there are benefits, too. This applies equally to raising the minimum wage. Low-income workers will spend the increase in income of $18 billion a year.
(1 comments) SHARE Wednesday, January 29, 2014 The Tragedy of Lower Wages
For business efficiency the government keeps wages down. Recessions, not extending unemployment benefits, and weak unions cause low wages that boost profits and widen the income gap. Child-labor laws repeal can lead to lower wages.
(2 comments) SHARE Wednesday, October 14, 2015 Public vs Private Practices
The rush to privatization is about market superiority. Efforts are afoot to privatize schools, prisons, etc., ignoring the fact that the efficiency of the market is exaggerated. Recently, there have been some salient examples of market failures due to human frailty: Volkswagen, Johnson and Johnson, and Martin Shkreli (of Turing Pharmaceuticals). There's no virtue of the market greater than practitioners give it.
(1 comments) SHARE Thursday, February 12, 2015 "Catch-22" in Government Poliicies
The government wants to cut education funding and privatize traditional government functions on assumption business is more efficient. Also, people lacking insurance who get sick and can't pay their medical bill so their credit score suffers. In 2008, 401(k)s lost 22 percent of their value and interest rates dropped to less than one percent after this date.
(3 comments) SHARE Wednesday, June 17, 2015 Consequential Political Play of Words
Words are often used in politics disingenuously to convey intentionally misleading ideas for political advantage. Obamacare, right-to-work, death tax rather estate tax, and prolife versus choice obscure sinister intent--right-to-work is intended to destroy unions, death taxes to disparate the estate tax, and Obamacare is uttered to malign the ACA. Stock buybacks don't grow the company, but grow the value of CEO stock holdings.
(1 comments) SHARE Monday, August 3, 2015 Cuts and More Cuts (Part 1)
Government spending cuts are driven by budget and deficit considerations, which are excuses for cutting programs Americans like: Social Security and Medicare. This is counterintuitive, higher top marginal tax rates fix the deficit and more money for the poor would be spent. Also, restrictions on trade through tariffs and VAT address the issue of US companies producing goods abroad for the US market.
(11 comments) SHARE Tuesday, December 11, 2012 Euro-area Economy Austerity Bad Strategy for the U.S.
When politicians focus their attention on the wrong variables bad things happen. Austerity in the euro-area economy led to another recession. In this country politicians are debating what to do about spending and taxes--fiscal cliff. Taxing the top two percent of the population more will not hurt the economy--never mind Norquist and Rep. Boehner. Another stimulus--$50 billion Pres. Obama proposes--is what the economy needs.
(5 comments) SHARE Saturday, September 1, 2012 Try something novel when all else fails
The Economic Stimulus package snatched the U.S. economy from a depression, but the recovery has been anemic with interest rates near zero. This has not stimulated demand. Maybe, higher interest rates could temper future inflation, and right now make people with interest bearing assets feel wealthier, and thus they will spend more. The point is when all else fails, it is prudent to try something else.
(1 comments) SHARE Wednesday, November 6, 2013 In the Budget Crisis...Just a Short Reprieve and Another Round Begins
Convoluted efforts to defeat, repeal, and defund the Affordable Care Act have failed. The most recent fiasco led to the shutting down of the government and a near default, both of which, to the chagrin of Republicans, failed as political strategy. How odd it is that Republicans can celebrate the tactics of hurting the country (especially government workers)and risking its financial credibility as means to get their own way.
(1 comments) SHARE Tuesday, February 16, 2016 Business practices that hurt the country
The quest for profits leads to activities that go against the best interest of the country. The business model results in companies moving abroad to avoid U.S. taxes, for cheap labor, and lax environmental protection laws. This represents not only a loss of a physical productive structure but also a rise in US unemployment.
(1 comments) SHARE Monday, September 21, 2015 Some Candidates Get the Economics Right
The polls suggest that non-politicians get it right: Mr. Trump wants to tax hedge fund managers, Dr. Carson might raise the minimum wage and index it to inflation. Carly Fiorina would defund Planned Parenthood using unreliable information about the organization selling baby parts. The second debate had presidential GOP candidates sniping at each other rather than dealing with serious economic problems facing the nation.
(5 comments) SHARE Friday, September 11, 2015 5.1 is Good News
The unemployment rate fell to 5.1 percent in August 2015. The number of jobs created--173,000--were below expectations. There are members of Congress and voters with a vested interest in poopooing any growth in employment--some even suggested the Administration has been cooking the books.
(1 comments) SHARE Wednesday, January 21, 2015 Growing Rhetorical Silence on Deficits
There have been at least two competing models on growing an economy out of a depression. One advocates deficit spending; another disavows deficit spending. The former attempts to supplant reduction in household and business spending, while the latter tries to encourage household and business spending through tax cuts and tax credits.
(4 comments) SHARE Monday, April 25, 2016 The political conversation about taxes
Some presidential candidates favor a flat tax and others a progressive tax as the avenue to faster economic growth. The evidence seems to favor a progressive tax. Investment in a market environment is determined by its profitability, not the tax rate.
(2 comments) SHARE Monday, April 1, 2013 Ramifications of the Frustrating Spending versus Taxes Debate Stalemate
Congress caused the credit downgrade of the U.S. by insisting on balancing the budget on entitlement cuts. Obama could have prevented this by invoking the 14th Amendment. Apart from Estonia, austerity does not produce economic growth. The deficit is not an issue, most of it is held by Americans. Confidence in the U.S economy is high. Foreign governments will lend us money with one percent interest rates. US should invest now.
(1 comments) SHARE Monday, May 13, 2013 The Weakening Case for Austerity
There have been a slew of articles discrediting austerity as the pathway to economy recovery. But there have also been many articles denouncing stimulus. I have written a few articles against austerity citing its failure under SAPs in Africa, and in the EU in countries like the U.K., Greece and Spain. Flawed research and condemnation of Keynes have been used to support austerity arguments.
SHARE Thursday, April 5, 2012 Deja vu all Over Again.
The article makes the point that elections matter in ways that affect economic and legislative policies. This was true when Hoover was president in the 1929 depression. It is true today when state governments put balancing the budget ahead of employment and economic growth, and when ideology dictates cuts to Medicare, Medicaid, education funding, EPA, and NPR. Recession requires stimulus spending not balanced budgets.
(1 comments) SHARE Friday, January 18, 2013 Keeping your eye on the ball
We're still debating government spending. We've taken our eyes off the ball. Deficits are necessary in bad economic times for growth. This is not the time to defund Planned Parenthood, intrude into women's reproductive issues, and attack unions. The economy might have been well of the way to a robust recovery if the politicians weren't distracted by partisanship. Congress needs to focus on pro-growth policies.
(1 comments) SHARE Thursday, February 7, 2013 Austerity again
Worry about the deficit is not the solution to slow economic growth. The 4th-quarter GDP drop is no excuse to cut entitlement spending. Also, irrational arguments are everywhere. For instance, Congress wants to destroy the U.S. Postal Service to save it; President Obama lied about closing Gitmo, but Congress failed to provide funds to close it. Government cannot create jobs--so, a government postal worker doesn't have a job.