Send a Message
to Fletch for Freedom

Comments

78

Joined

Oct 15, 2008

Fletch for Freedom Profile

Forums Owned

Recent Posts

Baltimore Sun

Obama's tax plan would cause job cuts

"'Keep it simple; a link will suffice. One example.' One week, no response. NewPatriot 1 - Fletch 0" All you've demonstrated is an inability to reason so glaring that I was inspired: http://fletchforfr eedom.blogtownhall .com/2008/10/28/fi scal_irresponsibil ity.thtml  (Oct 28, 2008 | post #71)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"did we not bail out the banks and wall street ." It was a horrible mistake. "Spreading the wealth means let everybody make some money..." No, it objectively does not. Spreading the wealth has nothing to do with "making money" - that's a process that takes place in the free market as employers create opportunities for workers. The process of taking from one group of people and giving it to another either by government purchase of services or direct transfer payments interferes with this process and reduces the opportunities created in the marketplace. "...is something wrong with that ?" Reduced emplyment opportunities and thus greater unemployment? I certainly think so.  (Oct 22, 2008 | post #105)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"just like monopoly and poker, the game stops for the guy with all the money too. I have read about this theory and there are merits." There ismo such "theory" . The concept that economic activity is a zero-sum game has been a fallacy debunked for centuries. The notion that wealth concentration is a problem in a society with a burgeoning middle class and robust income mobility - that allows nearly all of those in the poorest quintile to move up in well under a decade and a third of them will eventually reach the top quintile - is absurd on its face.  (Oct 22, 2008 | post #101)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"The only things that are straightforward are some simple models that economists have come up with to try to explain how people do business. However, none of these models fully encompass the complexities of human behavior, national policies, geopolitical events, etc etc." Here you are wrong. Economics is an a prioristic science built upon logical assessments of human behavior. None of the assertions that I have made have required ANY modeling of any kind and are entirely consistent with human behavior. I have relied SOLELY on the underlying precepts that would, of necessity, been included in such models but have not gone there. If I were attempt to quantify the amount of job loss associated with additional government spending or specifically identify how much excess liquidity were created by the Fed or if I were to identify the precise amount of inflationary pressure results from higher taxes on businesses, THEN I would have had to engage in econometric modelling. I have not gone through that exercise because the points I have made do not change as the result of "national policies, geopolitical events, etc etc." "And yes, there is always the danger of confusing concidence with causation but you fall into that trap yourself in your arguments." In absolutely no way. "How easily you dismiss two of the finest minds in America. Your bias is showing fletch." I dismiss no fine minds. If I were seeking investment advice, there is no one upon whom I would rely more quickly than Warren Buffet. But I would not go to him for economic analysis any more than I would go to him for brain surgery because the expertise is entirely different. As for Krugman, he was once a respected economist (albeit for an economic school that has fallen far out of favor), but, as has been noted by noted economists everywhere (most notably by William L. Anderson in his "Krugman the Keynesian" piece back in 2003), Krugman has completely abandoned even the pretense of adhering to economic principles in his ideological attacks on all things Republican (or even favored by Republicans, no matter how reasonable). Neither Krugman's nor Buffet's endorsement of Obama have anything to do with the underlying economic issues we are discussing. I am not endorsing McCain (nor will I); I am pointing out the economic reality.  (Oct 22, 2008 | post #100)

Baltimore Sun

Hold CEO responsible for huge energy losses

"This is what has become of American capitalism. Corporate executive long ago left behind responsibility and accountability... " Which, of course explains by the overwhelming majority of companies in this country perform well (in the absence of government intervention) making the US one of (if not the) most prosperous countries in the worl. Oh, I guess it wouldn't. "Socialism for companies and their executives... " Socialism for companies is, alas, all to frequent. Socialism for executives is all but unheard of. Instead must executive pay deemed "outrageous " is, in fact, either compensation actually earned in previous years (the exercise of options) or compensation for breach of employment contract (as in the case of Shattuck). "...when the public is made to suffer the faults of capitalism." Had capitalism had the slightest thing to do with the crises that make the public suffer, perhaps that statement would have had merit. The current crisis was entirely of the government's making: Fed policies that flooded the economy with liquidity along with false security provided primarily by Fannie Mae and Freddie Mac created irrational unsustainable markets. "They and their corporate brethren own the compensation committees and ensure that pay packages only go up and never down." CEOs face firings at a rate greater than for other positions and, in fact, average total compensation in real dollars has consistently risen for everyone. "Ask yourself why, even when fraud is proven, their employment contracts never allow for regaining their ill-gotten bonuses?" The question is invalid since actual proof of fraud breaks those same employment contracts (eliminating any right to severance) and makes the individual subject to suit for damages. The liability is the same for any employee caught with his hand in the cookie jar - you can't take back his last paycheck but you can go to court for restitution. "Shattuck, unfortunately, was no different than most incompetent, over compensated executives ... he just crashed and burned more spectacularly. " Assuming that Shattuck's demise can be attributed to "incompetence " (which may be the case but may also be due to market conditions - again, created by government - that were out of his control), the idea that this case is in anyway similar to the condition of any significant percentage of corporate executives is so at odds with actual reality, it is hard to take such an attack on them seriously.  (Oct 22, 2008 | post #4)

Baltimore Sun

Already spreading our kids' wealth around

Sadly, I can only agree. While the 2001 tax cuts are not "spreading wealth around" because they actually reduced the taking of wealth from actual taxpayers, the rebates (courtesy of Tom Daschle and Joe Lieberman), the stimulus package (and perhaps another) that didn't work (becasue it's impossible) and the bailout are unquestionably examples of the same foolishness.  (Oct 22, 2008 | post #4)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"Under Bill Clintons tax policy, the economy flourished and everyone including the rich and poor did better." Judges? Buzzz! I'm sorry but you don't win the Ginsu Knives, the year's supply of Turtle Wax or a copy of our home game. You are making an all-too-common mistake be confusing coincidence with causality. Yes, Bill Clinton was president during a long period of general prosperity, but such a period was well underway when he took office (the economy had turned more than a year earlier) and, as stated before, the growth rate of the economy slowed to its slowest post recession pace in history up to that time in the wake of his tax hike. Economically, it takes as long as six years for fiscal actions to be fully realized in the economy (though it is a truism that it is easier to destroy than to create), and the leading economic indicators were in full downturn mode a full two years before Clinton left office. [For some bizarre reason, I am of the opinion that, if you are going to assign presidential blame/credit for the economy (which is an oversimplification in and of itself) then it is more appropriate to base such an assessment on how the economy is when they leave rather tahn when they enter.] "Under W's tax policy, our economy has collapsed and everyone has suffered." The tax cuts, while by no means the only factor were a clear positive factor in the recovery from the recession that he inherited and the unprecedented economic damage in the wake of 9/11. Bush's SPENDING policy on the other hand has been a continuous drag on the economy which made this crisis (precipitated by the Fed and then made worse primarily by Fannie Mae and Freddie Mac - who are under Congressional oversight) worse than it otherwise would have been. The assertion that current tax policies were economically problematic (at least in relation to prior periods) is economically untenable. "Now, I realize that it is not this simple, but nor is it that increasing the tax on the rich will cause higher prices." That is not what I said. Increased taxation, regardless of who must pay it, is an economic drag because the resources must come from otherwise productive endeavors. Increased consumption taxes (regressive in nature) have the same effect. It isn't about rich or poor - it's about taxation in general. It is economically impossible for the government to spend these resources in any way that will offset this economic cost. It is a tax on BUSINESSES that, by their very nature, increase prices for consumers. Taxes are an operating cost for businesses and do not alter the required rate of return for an investment in any business venture. By definition, such an increase in expenses shifts the supply curve in such a way that the additional taxes are overwhelmingly passed through to the consumer. In addition, spending that is not paid for via direct taxation devalues the currency. The government must print money (either literally or through borrowing) to meet the shortfall. THAT is inevitably infaltionary, so, in that way, prices are forced to rise and such government imposed inflation can properly be described as a form of indirect taxation.  (Oct 21, 2008 | post #77)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"but it's fine to bail out Wall street and all the big banks and you don't mind . Bush/NcSame have nationalized the risks and privatized the wealth and you and stupid joe go along ." Sorry I missed this one. At what point exactly did I argue that it was apprpriate to socialize the losses?!?!  (Oct 21, 2008 | post #66)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

Finally, Jesse, no one said things were "great". The governmental meddling that created this crisis - the Fed pumping excess liquidity into the marketplace for three years and the false security and intervention of Fannie Mae, Freddie Mac and, to a FAR lesser extent, the CRA - cannot be corrected with further intervention. [Bush and the Republicans in Congress have PLENTY of things for which they can be blamed but this particular crisis ain't one of them - you need to examine actual cause rather than who happens to be in office at the time.] Unemployment actually is NOT way up only now reaching the 30-year average. It will continue to rise for a year and a half or so as unemployment lags economic turns regardless of who is in office. Banks are no longer failing (the total for the year is 15 of thousands). I agree that we can do better by stepping as far away from possible from the people who started this (the Fed and members of both parties who believe that interfering in the market achieves anything beneficial). The rant about McCain and Palin - to the very limited extent that it is accurate - still does not alter the underlying realities. "I am sorry I ever took off my rose colored glasses. I shall promptly put them back on and join the republican party." No need. You can justifiably look on the Republican Party as you have been. You simply should not have exchanged a pair of rose-colored glasses for another set that is no less misleading.  (Oct 21, 2008 | post #51)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

“When the democrats left the White House there was a surplus and projected future surpluses if things continued the same way.” Not at all. The recession was inevitable no later than 1998 and no surplus could possibly have survived a recession. Those projections were never worth the paper they were printed on. Moreover, Clinton never predicted nor wanted a surplus (predicting hundreds of billions in deficits every year until a surplus appeared). His spending (curtailed by a Republican Congress – admittedly for political rather than economic reasons) was simply outpaced by the economic growth that was underway before he took office. Presidents are not magical wizard kings who can wave a magic wand and change things on day one. “Over the last eight years, public services have dramatically decreased.” Not on this planet. “Anything but a welfare state.” More than half the federal budget is made up of transfer payments from taxpayers to individuals. “However, even if we get spending down, we cannot get it down to a point to repay the deficit, so again, taxes must go up.” Why can’t we? Certainly, tax revenues are more than half outlays. The only reason that deficits cannot be eliminated is political cowardice. That does not change the economic impacts. Again, insufficient taxation is demonstrably NOT the problem. “McCain proposes a spending freeze, which we all know will never actually happen…” Almost certainly true. “He has proven he has no grasp of the principles and has no real plan.” The same can (and must) be said for Obama. “Yes, Obama is going to spend, all presidents spend and I do not expect him to be any different. I do expect that he will be more responsible in doing so.” That statement is in direct contrast to Obama’s expressed positions. It cannot bear scrutiny. ”Yes, I am making it personal because this proposed tax applies to me.” It does not change the fact that the personal perspective is an invalid response to the economic points being made. “Perhaps my peers and I are in the minority?” See the prior comment. Further, anecdotal evidence is equally useless in a discussion such as this. “They [inefficient businesses] will eventually go out of business anyway for running their businesses so poorly, which means unemployment…” Again, no. Business that do not act efficiently (by doing such things as ignoring even incremental changes in their cost structure) will eventually go out of business and be replaced by more efficient actors in the marketplace. This, again, increases jobs. The position that the economic implications of a tax hike are acceptable because they are a non-issue to you remains completely untenable. And, yes, Ellis, I get it, but there’s always the possibility that someone else might learn.  (Oct 21, 2008 | post #47)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

“Your first point I do not understand. Please provide a dollar and cents real-life example.” Look up the post (318) referencing the government’s “creation” of 200 jobs ”I have no misapplied economies of scale.” Yes, you have. Economies of scale can only come into existence in the competitive marketplace, they are, by definition, the competitive advantages gleaned from such expansion. But, also by definition, government does not operate in the competitive marketplace so no such benefit can accrue. “I believe that lumping together everyones money will fix the economy faster than any one person.” THAT is a misapplication of economics. Again, I suggest looking up the “economic calculation problem” – a relatively simple concept. The COMBINED actions of all the individual actors in the marketplace are several orders of magnitude more efficient at allocating economic resources. Combining the funds merely assures that allocation choices are even more limited. By investing 3% into your business, it increases productive economic activity even slightly. This improves overall economic performance (and prosperity) along with everyone else who has likewise invested their 3% (or whatever it may be). This economic growth creates opportunities for employment, perhaps not at your shop but at some place where the marginal economic improvement made hiring worthwhile (and relatively quickly). “Once we get out of the miss, which I expect will take decades, then I'll re-evaluate my stance.” The point is that there is no level of spending or additional taxation that can possibly do anything to get us “out of this mess”. All that can be done is to improve economic efficiencies to the benefit of everyone (and that means LOWER spending and taxation). “I deploy technology to the fullest, which already erodes the headcount.” No, it doesn’t. Because your use of automation increases economic efficiencies, it creates MORE jobs (not least of which in the industries building the technology you use). This is called “creative destruction”. Jobs are eliminated where they are less efficient and more jobs are created where efficiencies create opportunities. The same dynamic applies if you determine that the most efficient investment of your resources is into marketing or employee development or whatever you choose.  (Oct 21, 2008 | post #46)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

StB- Since the chief economic objection to Obama's policies is the massive inflationary impact of his proposed spending and the regressive taxation of corporations which together MOST negatively impact... the poor savers those on fixed incomes the elderly ...please feel free to explain logically how the anti-socialistic position is less compassionate than the one that harms these groups. And since I give generously to charity, ran sports teams for local kids, was Cubmaster of the Cub Scout pack, volunteered time for womens' shelters and ran the main food drive for the local food bank for several years, I'll stack my generosity against anyone you'd care to suggest. "They never have problems with socialism for the greedy and corrupt because its benefits pigs like themselves." That is a bald-faced, ignorant lie only believed by those too ideologically blind to actually pay attention. If you couls actually demonstrate the ability to READ, you'd see uniform condemnation of such irresponsible things as the bailout in the comments above. If you wish to live in a dream world where tax policies do not have implications on the performance of the economy and that governmental goodies to ANYONE have to be paid for at a greater cost than any realized benefit, then that is certainly your choice. Your decision to remain economically uneducated is no one's fault but your own... ...and that laughter seems more like something done pretty much non-stop rather than an indictment of anything proposed here.  (Oct 21, 2008 | post #39)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"As for the bailout, you may not have voted for it, but you got it." The statement is (sadly) true; the implication is false. It is based on the absurd premise that there is some benefit to shifting losses from the financial sector to the taxpayer (or the saver). "I am not greedy and like to share." Feel free to do so. "The prices my business charge will not go up because my personal income tax have gone up." If you do not charge market prices, you must eventually go out of business. If the cost of production increases, prices in the marketplace will rise (as happens when taxes rise on businesses and not due to some imecilic notion of "greed") . It is a simple mattert of factoring the costs of production into the determination of acceptable return. "It is not the businesses that will be taxed more. It is the business owners who will be taxed more." The statement is preposterous. You are attempting to make a distinction that does not exist. Ultimately, the business is owned by someone. All resources flow beyond the business entity which is a legal fiction created to facilitate productive activities between individuals. "Compared to decades past, taxes are still down even with Obama's plan." Sure, taxes are lower than during the Great Depression, the period of multiple recessions during the 1950's, the late 1970's into the early 1980's, etc. They are not, as it happens, lower than when Clinton raised taxes early in his term slowing a recovery that was already underway to its slowest post-recession pace in history to that time (and let's not forget the direction the economy was going when he left office). "Again, I can pay more." Again, that's completely irrelevant. No one here is "bellyaching " but you, who seem to be morally outraged at us for having the audacity to present the implications of tax policy on the country.  (Oct 21, 2008 | post #33)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"Exactly - so stop worrying about a problem that is not yours!" Again, inflation and lack of opportunity/econom ic growth is a problem that IS mine, and, as a person genuinely concerned about the poorest elements of our society, I am concerned about such wrongheaded policies on THEIR behalf. Stop pretending that I am attempting make the issue personal when that is what YOU are trying to do. The only point I made regarding you personally is that a 3% impact on you is STILL an impact on you. To argue otherwise is obviously silly. "Why is the middle class not happy that Obama is on their side?" I imagine that those of us in the middle class who are not Obama supporters would be happier with him if the assertion that he were "on our side" were not so obviously ridiculous. Socialism doesn't work. It didn't work in the Soviet Union. It didn't work in Eastern (and Western) Europe. It didn't work as the New Deal or the Great Society. It didn't work under Nixon or Bush. It cannot work in the form of a "bailout ". It doesn't work as proposals by McCain. And it doesn't work as proposed by Obama. The only difference is that Obama's socialist proposals are several orders of magnitude greater than McCain's.  (Oct 21, 2008 | post #31)

Baltimore Sun

When 'Joe the plumber' looks in the mirror

"You forget that the government is the largest single employer in the nation. More taxes equal more government jobs." I forget no such thing. It does not change the fact that every one of those jobs was "created " at the expense of an even greater number of private sector jobs, by definition. "Re-investing 3% into my business will not grow the economy as quickly as bundling 3% of those in the highest tax bracket and re-deploying that cash. Economies of scale." You have completely misappled economies of scale (which have nothing to do with the issue at all). Re-investing in your business increases economic efficiencies at the margins, which, when aggregated with all the other private sector activities, is what creates jobs. Taxation decreases economic efficiencies - ther are no governmental economies of scale. "Again, we are in the red because of the endless war and Wall Street bailout." We are in the red primarily due to a Welfare state that has cost more than $7 trillion and has actually increased poverty. The completely wrong-headed bailout will certainly compound the isseu (though it is largely undispersed as yet) and the Iraq War has certainly contributed but amounts to less than 4% of federal outlays. "Taxes have to be increased somewhere and I would rather it be on me, than someone like my mother who would be struggling without my assistance." Now that's dishonest. As pointed out before, the only tax danger your mother has from either candidate is the indirect tax of inflation related to governmental spending and Obama wants to spend more by several orders of magnitude. "[A]t the end of the day taxes need to go up somewhere and I can absorb it easier than most." Actually, what needs to happen is that spending needs to go DOWN. You keep wanting to make this personal. You can't seem to grasp that your personal situation (or mine) has no relevance to the issue. The implications of governmental spending are the same whether you would gladly turn over 100% of your pay or not. I have neither complained about my own situation or attempted to tell you about yours. I have attemoted to give you a factual understanding of the implications of the position you support. I'm glad that you have "done something right" financially. It does not make your position any less invalid.  (Oct 21, 2008 | post #29)

Q & A with Fletch for Freedom

Headline:

Liberty and Justice for All

Hometown:

Loganville, PA

Local Favorites:

Baltimore Orioles (yes, I'm a glutton for punishment)

I Belong To:

The Ludwig von Mises Institute

When I'm Not on Topix:

I'm paying attention

Read My Forum Posts Because:

Ive studied and taught economics for decades

Read This Book:

The Constitution of Liberty by Friedrich A. von Hayek

Favorite Things:

baseball, learning, economics, fantasy/SF, history, etc.

On My Mind:

facilitating the destruction of socialist intervention

Blog / Website / Homepage:

http://fletchforfreedom.blogtownhall.com/default.aspx

I Believe In:

Liberty