Posted on 11/09/2024 1:40:01 PM PST by econjack
I'm a retired economics professor who voted against Harris, mainly because of her economic policies. For example, Harris (and virtually all Democrats) rally around the statement: “The rich should pay their fair share!” I have a number of problems with this statement when it is a basis for government economic policy.
For example, consider her statement that the rich don't pay their fair share. First, who gets to determine “a fair share”? Currently, the top 10 percent of income earners (i.e., the “rich”) paid 73.7% of all taxes collected by the IRS. Wage earners with $550,000 or more (the top 1%) paid 42.3% of all income taxes. The lowest 50% of wage earners ($43,600 or less) paid only 2.3% of the tax total. In other words, the rich pay income taxes at a rate that is more than 35 higher than the average worker. How is that “fair”? Who are the entrepreneurs who invest in the economy and generate economic growth which creates jobs? I don't think it's the “poor” people.
Harris also said she would raise taxes on the “greedy” corporations from 21% to 28%. Where does Harris think corporate money comes from? It comes from the American consumer. In most cases, the tax increase will mean higher prices to consumers as the company tries to pass the tax on to the consumer. The consumer loses via higher prices and the corporation loses by the increased taxes. The only winner is the government who collects the tax. Personally, I'd rather see the corporation keep the money to grow the business, create new jobs, and promote economic growth than the government use some part of it to fund a war in Ukraine or buy $600 hammers. I trust the corporations to spend the money more wisely than the government.
Another bothersome statement for me is that Harris is going to go after grocery stores for “price gouging”. Again, who gets to define what price gouging is? Clearly, that's what Harris wants the power to be able to define. I find it odd that she singled out one of the least profitable sectors in the US economy to serve up as one that engages in price gouging. The typical return for most grocery chains is 1-3%. That's price gouging to Harris. Really? Most grocery chains could make larger returns if they sold their chains and put the money into a saving account. If they did, not only would they make more profit, they wouldn't have to contend with those pesky people known as employees. Such policy statements tells me Harris doesn't understand economics, especially relative to the supply chain. What's worse, this suggests her economic policy advisors don't understand economics, either.
In a nutshell, what bothers me about almost all Democrat economic policies is that they are based on a zero sum result. That is, the only way to make one group economically better off (e.g., consumers), is to take it away from a different group (e.g., producers). The net gain is zero. An example will help illustrate the difference.
In 1972, George McGovern was the Democrat nominee for President. In an effort to court the union vote, McGovern met with Caesar Chevez, the leader of the lettuce pickers union. (See: https://www.worthpoint.com/worthopedia/1972-press-photo-cesar-chavez-george-4645282248.) After the meeting, McGovern said he would boycott the lettuce growers and not eat another salad until the workers wage demands were met. This meeting was pointed out to me by a colleague who taught in the Sociology department at a university where I taught. (She was a very liberal professor and would take any opportunity to rattle my conservative cage.) You don't need fancy math or graphs to see where this went wrong...just common sense. The conversation went like this:
Her: “McGovern has pledged not to eat another salad until the lettuce pickers get a wage increase!” Me: “Lois, that's exactly the wrong thing to do if you want them to get a wage increase.” Her: “Once again, you're a crazy conservative.” Me: “Hear me out. Right now there's probably 10,000 acres of lettuce to be picked. It's either picked soon or it rots in the field, right?” Her: “Exactly!” Me: “If the boycott is successful, what will happen to the demand for lettuce and its price?” Her: “Demand will decrease and the price will fall. That's the point of a boycott.” Me: “OK, and what will happen to the farmers' income?” Her: “It will fall. Again, that's the point!” Me: “And what does that do to the farmers' ability to give a wage increase?” Her: [crickets] Me: “Consider this: What if McGovern had said he was going to eat 5 salads a day and encouraged everyone else to do the same? What would happen to demand?” Her: “It would go up.” Me: “And since the supply of lettuce on those 10,000 acres is fixed for now, what would happen to price?” Her: “It would go up.” Me: “And what would happen to the farmers' ability to give a wage increase?” Her: “It would go up.” Me: “And what would happen to the cost to the farmers on NOT giving a wage increase?” Her: [Shouting at me] “That may be, but I don't believe it!” ...at which point she would spin on her heel and storm out of my office. Poor Lois. She never did learn that facts don't care how you feel about things.
The real lesson to learn here is that it is much easier to promote a policy that is a win for both sides rather than a zero sum policy. The boycott is a zero sum policy where workers gain, but the farmer loses. The opposite policy sees the farmer sell his lettuce at a higher price and the workers get a wage increase. True, the price of lettuce costs the consumer more, but, taken individually, it's small compared to the gains by the farmer and the worker. By the way, McGovern ended up with 5 electoral votes.
People overlook how important economic growth is to the well-being of the economic system. Suppose I'm rich (i.e., 90% of the “economic pie”) and you're poor (i.e., only 10% of the pie). The Harris approach is to take some part of my slice and give it to you. Your gain is my loss—a zero sum game. However, suppose Harris gives the rich a tax cut and the rich see this as a good sign and take those extra dollars and invest them. Let's further assume that the new investment increases the SIZE of the pie by 10%. Note: this means we both have an increase in our income even though our slices remain the same size! This is a win-win for both income groups. Lots of people hate Bezos because he so rich. However, they forget that in the early years, rather than spend the money on himself, Bezos plowed the funds back into the firm and grew it to the point where he now provides food, clothing, and shelter for over 250,000 people. Rick people are not automatically bad people.
Before you judge empty slogans like “They don't pay their fair share” or “Grocery stores are price gouging”, take a moment and think through what's really being said. If politicians bitch about “unfair taxes”, ask yourself this: “Who wrote the IRS tax code?” Harris had almost 4 years to work on the very problems she's complaining about, why didn't she work to promote solutions for any of them?
Very true, and in the first sentence of my post I said that I evaluated both in economic policy terms because that's what I understand better than their political differences. I have a "gut" reaction to her politics, but I don't feel qualified to judge her in that arena other than in my own mind.
Leftists’ aren’t capable. Sadly, most of my coworkers are left-leaning, being in health care.
If you were a fly on the wall in that place... You wouldn’t beliece what you hear.
One of the pharmacists, oddly a naval vet in his sixties, said his daughter is now holding off on having a family ecause Trump won. She’s afraid that if she has serious complications, she won’t be able to get, “treatment”, which is just inaccurate. She’s in TN, so the possibility for laws being passed exists. She could always move back to IL, where nothing will change, because it’s UP TO THE STATES. As it should be.
In any case, there are always carve-outs for complications which may be fatal to mom, which means fatal to child. No sense in losing two lives, right? Every abortion law I’ve read has: A) Had those carve-outs; B) Never lays the punishment on the woman, but on the one who performed the abortion; and lastly, Trump never talked about interfering further into abortion law that I can immediately recall.
These people are delusional.
The US model consists 24 stochastic equations and slightly over 100 identities. There are about 150 exogenous variables and many lagged endogenous variables. The stochastic equations are estimated by two-stage least squares. The data base for the model begins in the first quarter of 1952.
suggests it's fairly complex. The 150 exogenous variables and 100 identities further suggests that a lot of ceteris paribus assumptions are going on. I'd really have to spend some time with the model to assess the sensitivity of the model to those assumptions. Still, it could be interesting reading...thanks for pointing it out to me!
Methinks the daughter is letting politics influence her life far more than is reasonable. What is her evidence of denial of treatment if things take a turn for the worse? I would really press her on the evidence because this sounds like drinking too much Democrat koolaid over the years.
My understanding of Fair’s model fails at the first sentence. An economic approach to election modeling though appeals to me based on both the importance of economics and as an explanation of why election results so often seem to move in sync in modern nations. The reason is either economics or astrology, and I know enough to pick economics.
That’s exactly right. That’s also what the Democrats should have done during Trump’s first term: dealmaking. Instead, they went scorched-earth trying to take him down and stop him at all costs.
If the Democrats are smart, and I’m not counting on it, they should try to negotiate rather than obstruct the Trump agenda. For example, Trump did prison reform during his first term. That could have easily been a Democrat initiative that earned them political capital that would have come in handy during this year’s election. They squandered this and every opportunity to make deals and find common ground. (The Democrats did engage in the negotiations and ultimately supported the reform, but it took Republicans pushing the legislation forward, which is why Democrats did not get credit as they could have.)
The modern Democrat party has been taken over by the radical left. They think the moderate Trump administration, slightly left-leaning Elon Musk, fairly liberal Joe Rogan, and very left-of-center Robert F. Kennedy Jr. are all “right-wing extremists”. To them, Karl Marx is a moderate. They’re just nuts.
If the Democrats are smart, and I’m not counting on it,
Anti trump is their identity. eventually more of their “constituents” will see that.
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