As Time magazine points out, the Communications Act of 1934 grants the president the power to shut down wire communications during a time of war, and the Internet is now recognized as a wire communication medium.
As Time magazine points out, the Communications Act of 1934 grants the president the power to shut down wire communications during a time of war, and the Internet is now recognized as a wire communication medium.
The board - a group of economists, policymakers and business leaders led by former Federal Reserve chairman Paul A. Volcker - was established soon after President Obama took office last year and was charged with developing a series of options for simplifying the tax code, improving compliance and bringing down a corporate tax rate that, at 35 percent, is the second highest in the industrial world, after Japan's.
Seniors today will receive far more benefits from government transfer programs (programs that redistribute resources among groups) than their share of the national tax burden. On average:
1. A male reaching 65 years of age today can expect to receive $71,000 more in government transfer benefits (of all kinds at both the federal and state levels, but mainly from Social Security and Medicare) than he will pay in taxes (of all kinds at both the federal and state levels) before he dies.
2. A 65-year-old female can expect a net gain of more than twice that amount; she can expect $163,000 more in benefits than she will pay in taxes.
A far different picture confronts people entering the labor market today. In general, they will pay far more in taxes than they will receive from transfer programs, and any expansion of elderly entitlements will make things worse. For example:
3. A 20-year-old female can expect to pay $92,000 more in taxes than she will receive in transfer benefits over her lifetime.
4. The future looks more than three times as bleak for her male cohort, who can expect to pay $312,000 more in taxes than he will ever receive in benefits.
In a study of 44 large fiscal adjustments in 24 advanced economies since 1975, Broadbent and Daly discovered that reducing expenditures by 1 percentage point a year boosted average annual growth by 0.6 percentage point. Raising the ratio of taxes to GDP by the same margin cut growth by an average 0.9 percentage point.Wall Street Journal:
In addition to Washington, the states without an income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Combined they had an average 18.2% growth rate in jobs over the past decade, more than twice the 8.4% job growth of the nine states with the highest income tax rates.2.) Privatization doesn’t work.
A detailed and rigorous Bank examination of 12 privatizations in four countries found that divestiture was good for the economy as a whole--and led to higher productivity and faster growth in all but one case. […]The Chilean telephone company doubled its capacity in the four years after sale. […]Another study found that 41 firms privatized by public offerings in 15 countries […]increased returns on sales, assets, and equity, raised internal efficiency, improved their capital structure, and increased capital expenditures. They also expanded their workforces by small margins.3.) The government is needed to build roads.
Louisiana began subsidizing railroads before Illinois and most other states (in 1833) and consequently was on of the first states to forbid state aid for internal improvements (in 1845). The failures of government-subsidized internal improvements were so pronounced that by 1860 Missouri and Massachusetts were the only two states in the union that had not yet amended their constitutions to prohibit internal improvement subsidies. Missouri finally got around to it in 1875.4.) The Americans with Disabilities Act has primarily helped the disabled.
Table 1 compares changes in the employment rates of disabled and nondisabled men before and after enactment of ADA. Employment of men with disabilities fell by 10.9 percentage points following the enactment of ADA, while employment of nondisabled men fell by 3.1 percentage points. Thus, ADA reduced the employment of disabled men by 7.8 percentage points.5.) Licensing is good for the economy.
[A] 2006 Gallup survey found that 29 percent of the workforce was required to hold a license from a government agency. […]Dorsey (1983, 171) finds that “licensing regulations exclude less educated and minority workers more than proportionally.” […]Kleiner and Krueger (2008) find that licensing is associated with a 15 percent wage premium.6.) To reduce crime, people should not have fire arms.
7.) The police state is good for you.
In the five years before Washington's ban in 1976, the murder rate fell from 37 to 27 per 100,000. In the five years after it went into effect, the murder rate rose back up to 35. […]Chicago's murder rate fell from 27 to 22 per 100,000 in the five years before the law and then rose slightly to 23. […]Chicago's murder rate fell from being 8.1 times greater than its neighbors in 1977 to 5.5 times in 1982, and then went way up to 12 times greater in 1987.
8.) FDR saved us from the Great Depression
The FBI issues roughly 50,000 [National Security Letters] a year, and the Justice Department’s own internal review in 2007 concluded that many of them were issued abusively, skirting the law and internal rules. The idea is simple: the device is something like a subpoena, though it doesn’t require approval of a judge to issue.
The economic fundamentals that drive all expansions were very favorable during the New Deal. Productivity grew very rapidly after 1933, the price level was stable, real interest rates were low, and liquidity was plentiful. […]So what stopped a blockbuster recovery from ever starting? The New Deal. […]The most damaging policies were those at the heart of the recovery plan, including The National Industrial Recovery Act (NIRA). […]The NIRA covered over 500 industries, ranging from autos and steel, to ladies hosiery and poultry production. Each industry created a code of "fair competition" which spelled out what producers could and could not do, and which were designed to eliminate "excessive competition" that FDR believed to be the source of the Depression. […]We have calculated that manufacturing wages were as much as 25% above the level that would have prevailed without the New Deal.9. “Obamacare” covers pre-existing conditions
Access to the “high risk pool” is limited and the pool is underfunded. It will cover few people, and will run out of money in 2011 or 2012. Only those who have been uninsured for more than six months will qualify for the high risk pool. Only 0.7% of those without insurance now will get coverage, and the CMS report estimates it will run out of funding by 2011 or 2012.Washington Post:
18 states have officially declined to participate in the new high risk pools, which offers a subsidized insurance option to those with pre-existing conditions.10. Government workers have it rough.
From January 2008 to January 2010, private-sector jobs plunged from 115.5 million to 106.8 million. But the number of federal, state and local public employees climbed up a tick, from 22.3 million to 22.4 million. […]In 2009, […]compensation for the average federal civilian worker totaled $123,049 including benefits valued at $41,791. That's more than twice what the average private-sector employee earned -- only $61,051, including benefits.
In March of 1865, less than 30 days after his appointment as treasury secretary, Hugh McCulloch touched off a political firestorm. He said that it was the duty of California to conform her policy to the federal Legal Tender Act of 1862.
The Legal Tender Act allowed the US Treasury to print paper money that was backed only by the good faith of the US government. The first printing of this fiat currency, in early 1862, yielded 25.5 million pieces of currency. These became known as "greenbacks" due to the green ink used on the back of the bill. Of the 36 states, 35 recognized the greenbacks as money, equal with gold and silver; only California made a distinction.
In the spring of 1863, California created a law that allowed any business contract to identify the kind of money or currency to be used in the fulfillment of the contract. If the contract required payment in gold, for example, then only a gold payment fulfilled the contract. In the other states, greenbacks could be a substitute for gold or silver payments.
By the time McCulloch was appointed treasury secretary, just 37 months after the Legal Tender Act, greenbacks were worth less than half of their original value. California's hesitancy to use these demand notes as an equal exchange for gold was proving wise.
It wasn't that California didn't recognize greenbacks as money. The California law simply allowed a contract to name the form of money to be used. For example, if an 1864 contract required the payment of $1,000 in gold in 1865, a payment in greenbacks would not be the same value as a payment in gold. (The party delivering the paper money would be paying the debt at a deep discount.) So the California Supreme Court upheld that a contract stating "$1000 in gold" required the delivery of gold. The contract could have just as easily read "$1,000 in greenbacks" and thus required greenbacks. Few California contracts were being written for payment in fiat currency.
Marriner Eccles was the Governor of the Federal Reserve System in 1941. On September 30 of that year, Eccles was asked to give testimony before the House Committee on Banking and Currency. The purpose of the hearing was to obtain information regarding the role of the Federal Reserve in creating conditions that led to the depression of the 1930s. Congressman Wright Patman, who was Chairman of that committee, asked how the Fed got the money to purchase two billion dollars worth of government bonds in 1933. This is the exchange that followed.ECCLES: We created it.
PATMAN: Out of what?
ECCLES: Out of the right to issue credit money.
PATMAN: And there is nothing behind it, is there, except our government's credit?
ECCLES: That is what our money system is. If there were no debts in our money system, there wouldn't be any money.
The battle between taxpayers and government unions will define the fiscal future of the 50 states, and the newest battlefield is Washington state. That's where a few rich taxpayers led by Bill Gates Sr. and the Service Employees International Union (SEIU) are bankrolling a November ballot measure to create the state's first income tax.
And not just a toe-in-the-water tax. They're diving into the deep end with a proposal that would immediately impose a 5% tax rate on income above $200,000, or $400,000 for married couples. The rate would climb to 9% on single filers making $500,000, or $1 million for couples.
No state has introduced an income tax since Connecticut nearly 20 years ago, and that state's experience has not been happy. The top rate in Hartford began at 4.5% but has since climbed to 6.5%. Washington wants to leap over that and achieve California and New Jersey heights in one giant step. Washington would move overnight from one of the nine states with no income tax to having the eighth highest rate in the country.
Mr. Gates, a wealthy lawyer whose son is among the richest men on the planet, is pitching the proposal as a chance for 97% of the voters to pay the state's bills by socking it to the richest 3%. What he doesn't say is that Washington's lack of an income tax is among its main comparative advantages in luring those top 3%, along with their businesses and jobs, into the state.
In addition to Washington, the states without an income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Combined they had an average 18.2% growth rate in jobs over the past decade, more than twice the 8.4% job growth of the nine states with the highest income tax rates.
A front-page story in today’s New York Times begins:
Michael R. Bloomberg is a former Wall Street mogul with a passion for the rights of a private property owner.The story is about the not-really-at-Ground-Zero mosque, of course.
Bloomberg has a passion for property rights — except when the property owner wants to allow smoking on his own property or just wants to keep the property he owns even if a richer person wants it.
Just as inflation is generally popular for its narcotic effect, deflation is always highly unpopular for the opposite reason. The contraction of money is visible; the benefits to those whose buying prices fall first and who lose money last remain hidden. And the illusory accounting losses of deflation make businesses believe that their losses are greater, or profits smaller, than they actually are, and this will aggravate business pessimism.
It is true that deflation takes from one group and gives to another, as does inflation. Yet not only does credit contraction speed recovery and counteract the distortions of the boom, but it also, in a broad sense, takes away from the original coercive gainers and benefits the original coerced losers. While this will certainly not be true in every case, in the broad sense much the same groups will benefit and lose, but in reverse order from that of the redistributive effects of credit expansion. Fixed-income groups, widows and orphans, will gain, and businesses and owners of original factors previously reaping gains from inflation will lose. The longer the inflation has continued, of course, the less the same individuals will be compensated.
Some may object that deflation "causes" unemployment. However, as we have seen above, deflation can lead to continuing unemployment only if the government or the unions keep wage rates above the discounted marginal value products of labor. If wage rates are allowed to fall freely, no continuing unemployment will occur.
As soon as the Federalist Party gained power it outlawed free speech, in clear violation of the First Amendment of the U.S. Constitution. The spark that ignited this totalitarian impulse was an editorial by the grandson of Benjamin Franklin, Benjamin Franklin Bache, editor of the Philadelphia Aurora newspaper. Bache was a follower of Jefferson and his Democratic-Republican Party, and was outspokenly opposed to the Federalist program of protectionist tariffs, central banking, corporate welfare, high taxes, and a large public debt. In an editorial he called John Adams "old, querulous, bald, blind, crippled, toothless Adams." Federalists responded in kind. Noah Webster called the Democratic-Republicans "the refuse, the sweepings of the most depraved part of mankind . . ."
Abigail Adams is said to have gone berserk over Bache’s characterization of her husband, and she and the Federalist newspapers began calling for Bache’s punishment. The result was the Alien and Sedition Acts. The Sedition Act was enacted on July 14, 1798, and made it a crime to publish "false, scandalous, and malicious writing against the government or its officials." Of course, the government itself would solely decide what constituted improper and illegal speech, as was the case in the Soviet Union and all other totalitarian states during the twentieth century. The law was written so as to expire on the day that John Adams left office so that it would only be used against Jefferson’s Democratic-Republican Party.
Many of Jefferson’s followers resented the ostentatious displays of king-like grandeur that the Adams’s were known for. For example, according to the Wikipedia entry on the Alien and Sedition Acts, in July of 1798 President John Adams and his wife Abigail were making their way back home to Braintree, Massachusetts in elaborate carriages as part of a parade, with canons firing to celebrate their entry into every city and town along the way. A man named Luther Baldwin was sitting in a pub in Newark, New Jersey where, upon hearing the canon fire, said "There goes the president and they are firing at his arse." He also said that he didn’t care if "they fired through his arse." For this he was sent to prison and assessed fines and court costs.
In November of 1798, a man named David Brown put up a liberty pole in Dedham, Massachusetts with the words, "No Stamp Act, No Sedition Act, No Alien Bills, No Land Tax [referring to Hamilton’s national property tax], Downfall to the Tyrants of America; Peace and Retirement to the President; Long Live the Vice President [Jefferson]." For this he was fined and sentenced to eighteen months in prison.
Several dozen newspaper writers who were supporters of Jefferson were arrested under the Sedition Act for criticizing the government. In addition, Federalist party mobs often attacked newspapers and newspaper editors who were sympathetic to the Democratic-Republican Party or who criticized John Adams. Federalist Roger Griswold, a congressman from Connecticut, attacked fellow Congressman Mathew Lyon of Vermont by beating him with a hickory cane on the floor of the House of Representatives after Lyon criticized the Federalists as being "in opposition to the interests and opinions of nine-tenths of their constituents."
After Lyons wrote a newspaper article suggesting that Adams had "an unbounded thirst for ridiculous pomp, foolish adulation, and selfish avarice," the Adams administration convened a grand jury and indicted Lyons. After walking the Revolutionary War veteran through the town of Vergennes, Vermont in shackles, he was imprisoned. He ran for reelection from prison and won handily.
All of this is what motivated Thomas Jefferson to author the Kentucky Resolve of 1798, accompanied by Madison’s Virginia Resolve, which was almost identical.
[...]South Carolina’s nullification of the Tariff of Abominations in 1832 was not even the second example of the principle of nullification being implemented. Far from it. After President Jefferson enacted a trade embargo in response to British theft of American ships and the kidnapping of American sailors, New England legislatures nullified the embargo act by quoting Jefferson himself. For example, on February 5, 1809, the Massachusetts legislature declared that the embargo was "not legally binding on the citizens of the state" and denounced the law as "unjust, oppressive, and unconstitutional" (See James J. Kilpatrick, The Sovereign States). All of the New England states (where the shipping industry was concentrated), plus Delaware, officially nullified the embargo act.
For connoisseurs of Budweiser, the 1970s were a pale golden age. In every supermarket across the land, the King of Beers maintained its status as the grocery world’s most superfluous monarch, reigning over just a handful of domestic taste-alikes and one or two upstart imports. The American public had decided it liked its beer cheap, bland, and less filling, and the industry—which, after decades of consolidation, consisted of a mere 44 breweries in 1979—was happy to oblige. Consumers with a thirst for something tastier, or at least different, had few options. Things were so bad, in fact, that Coors, distributed in just 11 Western states, was considered such a rare delicacy in other parts of the country that bootlegged cases went for three times their retail price in New Jersey and Tennessee. Was it any wonder that the nation was feeling weak and watered down?One more bit:
Then Jimmy Carter took pity on our wretched souls. In 1978 he signed Senate Amendment 3534, a portion of which gave each household permission to produce up to 200 gallons of tax-exempt beer each year.
In 2002, when two reporters contacted Conable to discuss his role in helping jump-start the “American beer renaissance,” he didn’t even recall the bill.
Federally-backed program aims to help outsourcers in South Asia become more fluent in areas like Java programming—and the English language.
Despite President Obama’s pledge to retain more hi-tech jobs in the U.S., a federal agency run by a hand-picked Obama appointee has launched a $36 million program to train workers, including 3,000 specialists in IT and related functions, in South Asia.
Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent’s low labor costs.
Under director Rajiv Shah, the United States Agency for International Development will partner with private outsourcers in Sri Lanka to teach workers there advanced IT skills like Enterprise Java (Java EE) programming, as well as skills in business process outsourcing and call center support. USAID will also help the trainees brush up on their English language proficiency.
USAID is contributing about $10 million to the effort, while its private partners are investing roughly $26 million.
“To help fill workforce gaps in BPO and IT, USAID is teaming up with leading BPO and IT/English language training companies to establish professional IT and English skills development training centers,” the U.S. Embassy in Colombo, Sri Lanka, said in a statement posted Friday on its Web site.
“Courses in Business Process Outsourcing, Enterprise Java, and English Language Skills will be offered at no charge to over 3,000 under- and unemployed students who will then participate in on-the-job training schemes with private firms,” the embassy said.
USAID is also partnering with Sri Lankan companies in other industries, including construction and garment manufacturing, to help create 10,000 new jobs in the country, which is still recovering from a 30-year civil war that ended in 2009.
But it’s the outsourcing program that’s sure to draw the most fire from critics. While Obama acknowledged that occupations such as garment making don’t add much value to the U.S. economy, he argued relentlessly during his presidential run that lawmakers needed to do more to keep hi-tech jobs in IT, biological sciences, and green energy in the country.
He also accused the Bush administration of creating tax loopholes that made it easier for U.S. companies to place work offshore in low-cost countries.
Pick your category, and Texas dominates. Three of the top five most resilient major metro areas for employment are in Texas: McAllen at one, Austin at three, and San Antonio at five. El Paso and Houston make the top 15. How about state debt? Texas ranks fourth in the country. Texas cities claimed four of the top five spots in the Milken Institute's Best Performing Cities Index, four of the top ten of Forbes' "Cities Where the Recession is Easing," and another four spots in last year's Top Ten in Homebuilding (admittedly, a bit like winning a Warmest Ice Cube contest).
[...]Maybe it's the lack of a state income or capital gains tax. Or the dearth of union workers. Or the plentiful labor supply on the border of Mexico, or the lower wages, or the stable and lean regulations.
Two friends of mine, both economists, came upon a stimulus project recently that illustrated the problem. On a Wyoming highway they saw a sign that read “Putting America to Work: Project Funded by the American Recovery and Reinvestment Act” and prominently featured a picture of a worker digging with a shovel. Out on the road, there was plenty of equipment, including a gigantic asphalt paver, dump trucks, rollers and service vehicles. But there wasn’t a single laborer with a shovel. That project employed capital, certainly, but not many human beings.
Like many such stimulus projects, it could be justified if you accept the idea that gross domestic product, not jobs, is central — a misconception rooted in economic theory, or at least in the way that Keynesian economic theory has evolved.
The conventional concept of “recession” has been defined in terms of G.D.P., not unemployment, which is perceived as a “lagging indicator.” It is widely assumed that jump-starting “the economy,” as measured by G.D.P., is the most fundamental move we should make.