Free Republic

In an interview on the FOX Business Network’s Countdown to the Closing Bell, Harvard Economics Professor Greg Mankiw said the President-elect shouldn’t be meddling in the affairs of corporate America, and his decision to do so may not be beneficial for the economy in the long run. “There’s a big difference between being a CEO of a company and being President of the United States. A CEO is basically a central planner for that company. The President of the United States is not the central planner for the U.S. economy,” Mankiw said.

Warren Buffett has an op-ed in today's NY Times on one of his most popular themes: The rich should pay more in taxes.  At first blush, his position seems noble: A rich guy says that people like him should pay more to support the commonwealth.  But on closer examination, one realizes that Mr Buffett never mentions doing anything to eliminate the tax-avoidance strategies that he uses most aggressively.  In particular: 1. His company Berkshire Hathaway never pays a dividend but instead retains all earnings.  So the return on this investment is entirely in the form of capital gains.  By not paying dividends, he saves his investors (including...

In a NYT Op-Ed today, Warren Buffett argued that the rich should pay a certain minimum tax, and he explained to activist Grover Norquist that it's preposterous to think that businessmen would forgo profitable deals merely because the rate of tax on the profits would go up. But why do people listen to Buffett on taxes? Basically because he's a rich, successful guy (which is why a lot of people are listened to on a lot of subjects). To that end, economist and former Romney advisor Greg Mankiw has a short post talking about Buffett as a master of "tax...

Imagine you have a friend who has a budget problem. Every month he spends more than he earns. His credit card bills are piling up. He is clearly on an unsustainable path. Then one day he comes to you with an idea. Friend: I am going to take off a few days from work and fly down to Bermuda for a quick vacation. You: But isn't that expensive? Won't that just add to your growing debts? Friend: Yes, it is expensive. But my plan is deficit-neutral. I have decided to give up that half-caf, extra-shot caramel macchiato I order at...

Greg Mankiw's recent blog post carries a rather risky title: "The Monetary Base Is Exploding. So What?" I really am trying to understand the viewpoint of the wide range of economists (including Mankiw, Paul Krugman, Scott Sumner, Mike "Mish" Shedlock, Bryan Caplan, and David R. Henderson) who think the dollar is not going to fall sharply in the foreseeable future. But I've yet to see a convincing explanation as to how Bernanke (or his successor) is going to avoid large price inflation, given the corner the Fed and the feds have painted us into. Mankiw's latest post recapitulates many of...

~SNIP~Congress passed a sizable fiscal stimulus. Yet things turned out worse than the White House expected. The unemployment rate is now 10 percent — a full percentage point above what the administration economists said would occur without any stimulus. To be sure, there are some positive signs, like reduced credit spreads, gross domestic product growth and diminishing job losses. But the recovery is not yet as robust as the president and his economic team had originally hoped. So what to do now? The administration seems most intent on staying the course, although in a speech Tuesday, the president showed interest...

... [T]he signature domestic issue in President Obama’s first year in office — health care reform — is shaping up to be the antithesis of President Reagan’s supply-side economics. The starting point for Ronald Reagan was the idea that people respond to incentives. The incentives that he most worried about were those provided by the tax system. According to his budget director, David A. Stockman, Mr. Reagan would regale the staff with stories of how he, as an actor, used to alter his work schedule in response to the tax code. “You could only make four pictures, and then you...

It has always been understood, sometimes whispered, that Geroge Soros, the great beneficiary of markets, hates them. The truth is now out in the open. John Stossel reports, via FT, that Soros will give $50 million to start a new think-tank to counter "the unwavering belief in unchecked free markets, which remains pervasive in universities." Soros says: "The ideologists in the free markets are still in command and I think they'll be very difficult to remove because they have tenure." If anything proves that one has to question Soros' analytical ability, it is this statement. The leading economic textbook in...

Does He Lie? No, But Obama Implies, Misdirects, and Misleads. By Charles Krauthammer. You lie? No. Barack Obama doesn’t lie. He’s too subtle for that. He . . . well, you judge. Herewith three examples within a single speech — the now-famous Obama-Wilson “you lie” address to Congress on health care — of Obama’s relationship with truth. (1) “I will not sign (a plan),” he solemnly pledged, “if it adds one dime to the deficit, now or in the future. Period.” Wonderful. The president seems serious, veto-ready, determined to hold the line. Until, notes Harvard economist Greg Mankiw, you get...

It's a stretch By MATT WICKENHEISER, Portland Press Herald Writer Two all-beef patties, special sauce, lettuce, cheese, pickles (and) onions on a sesame-seed bun might make an American classic, the Big Mac, but are they steps in a manufacturing process? That's the question raised in the Economic Report of the President, given to Congress recently. In the manufacturing chapter, President George W. Bush's economists suggest that the government's definition of "manufacturing" is vague, which might affect policy-making and even provide factory tax breaks for fast-food businesses. "When a fast-food restaurant sells a hamburger, for example, is it providing a 'service'...

In the national debate over health insurance reform, a key issue is whether the government should offer a "public plan" to compete with private insurers. For example, in today's NY Times, Paul Krugman writes, What’s still not settled, however, is whether regulation will be supplemented by competition, in the form of a public plan that Americans can buy into as an alternative to private insurance. Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for...

When the Obama stimulus plan was proposed, the president's economic team put out a report in January 2009 that purported to show what would happen with and without the fiscal stimulus. The chart above is from page four that report, together with the actual results over the past couple months. As you can see, the actual outcome is significantly worse than the projection with the stimulus plan and is, in fact, roughly on track with what was projected without the stimulus. What does this mean? One interpretation is that the fiscal stimulus has failed to achieve what Team Obama thought...

http://www.youtube.com/watch?v=OdteQzvWlqE&feature=related This illustrates how clueless Bush's economic advisors were and no doubt alot of Republican economic advisors are the same when standing next to a true freemarketer

Time For Mankiw To Resign On Saturday I checked my watch to verify the date. A quick check showed it was April 18. Just to be sure I asked my wife Joanne and she assured me it was the 18th. Likewise my computer said it was the 18th. For a brief moment, I thought we had flashed back in time and it was April 1. April Fool's day was the only rational explanation I could come up with for a column in the New York Times by Gregory Mankiw, professor of economics at Harvard.

Wanna bet some of that Nobel money? Paul Krugman suggests that my skepticism about the administration's growth forecast over the next few years is somehow "evil." Well, Paul, if you are so confident in this forecast, would you like to place a wager on it and take advantage of my wickedness? Team Obama says that real GDP in 2013 will be 15.6 percent above real GDP in 2008. (That number comes from compounding their predicted growth rates for these five years.) So, Paul, are you willing to wager that the economy will meet or exceed this benchmark? I am not...

[Snip] Critics of China say it is keeping the yuan undervalued to gain an advantage in the international marketplace. A cheaper yuan makes Chinese goods less expensive in the United States and American goods more expensive in China. As a result, American producers find it harder to compete with Chinese imports in the United States and to sell their own exports in China. There is, however, another side to the story. The loss to American producers comes with a gain to the many millions of American consumers who prefer to pay less for the goods they buy. The situation is...

Regular readers of this blog have a pretty good sense of my policy preferences. But for those occasional readers who might be stopping by, let me reiterate what I would do right now if I were the fiscal king. I would institute an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax. I would make the two tax changes equal in present value, so while the package results in a short-run budget deficit, there is no long-term budget impact. Call it the create-jobs, save-the-environment, reduce-traffic-congestion, budget-neutral tax shift. I...

PAY ATTENTION TO BUDGET CONSTRAINTS The nation faces a long-term imbalance between government spending and tax revenue. The fundamental problem is that the federal government has promised the elderly more benefits than the tax system can support. This fiscal imbalance will become acute as more baby boomers retire and start collecting Social Security and Medicare benefits. Yet during the campaign, Mr. Obama promised to cut taxes for 95 percent of Americans, to vastly expand health insurance coverage and never to cut Social Security benefits or raise the retirement age. The new administration will almost surely have to renege on some...

In his campaign to win the Republican nomination for President, expect former Massachusetts Gov. Mitt Romney to have a strong economic plan and to hit rival candidates hard on taxes. Romney has compiled a team of dedicated Reaganite supply-siders -- many of whom also helped engineer President Bush’s tax cuts -- to produce what Romney’s spokesman called a “very idea-based campaign.” The Romney campaign is staffed by a number of experienced policy heavyweights. Leading the economic team are R. Glenn Hubbard, dean of Columbia University Graduate School of Business, and N. Gregory Mankiw, a visiting fellow at the American Enterprise...

WASHINGTON (Reuters) - Robust home building and stronger exports helped the economy expand at a faster-than-expected 3.8 percent annual rate in the first quarter, the Commerce Department said Wednesday as it revised its growth estimate up for a second straight time. Initially, the department said gross domestic product -- the broadest measure of total economic activity within the nation's borders -- grew at a 3.1 percent rate in the first quarter, but it pushed that number up to 3.5 percent a month ago before finally revising it to match the 3.8 percent rate posted in the closing quarter of 2004....