Anti-Economics

Discussion in 'Political Action Forum' started by DComeaux, Jan 21, 2021.

  1. DComeaux

    DComeaux Elite Refuge Member

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    We Are About to Have a Four-Year Lesson in Anti-Economics

    Thomas Del Beccaro

    CONTRIBUTOR

    January 19, 2021 Updated: January 19, 2021

    Commentary

    The Biden Presidency is set to begin. After a Trump Presidency that understood and worked with the laws of economics, we are about to endure yet another Democrat presidency that seeks to defy the laws of economics—and with that, Americans will suffer.

    As we consider the years in front of us and the policies of the incoming Biden Administration, we should be alarmed at how few people actually believe in economics. I write that because it is plain for everyone to see how many support policies that defy the laws of economics and yet expect good economic outcomes.

    At its core, economics is nothing more than the study of human behavior measured over all of time. Across millennia, humans have consistently responded to situations, stimuli, incentives, and the loss of those incentives. The more prominent of those consistent responses are often termed the laws of economics.

    Most have heard of the phrase supply and demand.

    Over time, the price we pay for items is determined in significant part by the total supply of any given commodity or service matched against the demand for those items. We know that if the demand rises for any given goods or services the prices tend to rise. As demand eases, so too do prices. A lack of supply, all other things being equal, will tend to push prices higher whereas a bountiful supply will tend to push them lower.

    The reason for that dynamic is contained in a more basic law of economics that is called the law of demand. Investopedia will tell you that “The law of demand states that quantity purchased varies inversely with price.”

    In other words, the more something costs, the less of it you tend to get. Ford outsells Rolls Royces largely due to Ford’s lower price. More $30,000 cars are sold than $300,000 cars. The same holds true for blue jeans and houses.

    Incredibly, most of our politicians fail to understand that the law of demand applies to the whole of the economy, including jobs, income, and economic growth as a whole. That core economic principle applies to the whole economy, not just jeans and cars.

    So, when income tax rates are raised, that is, the cost on income is raised, by economic law, that is a disincentive that exerts a downward pressure on the amount of income people make and/or report. When wages are “raised” by government mandate, that is, the minimum wage, that results in a downward pressure on hiring because jobs now cost more.

    In our short history, we have now had five major tax reforms, the 1920s, ’60s, ’80s, 2000s, and in late 2017. Each time, our economy had weak growth or less when the tax reform was proposed. Each time, with incentives to make income increased, the economy expanded, jobs increased, incomes rose, and tax revenues as well. No better example of that exists than when our tax rates were cut in the 1920s from a top rate of 77 percent to 25 percent and growth exploded, that is, the Roaring ’20s, as money previously parked in tax-free instruments was put to work in the economy after incentives were restored.

    By the same token, as Thomas Sowell has labored to teach us for decades, government minimum wage increases—consistent with the law of demand—result in job losses.

    In 2017, the Trump Administration championed major tax reform. The never-growthers that don’t believe in economics told us that America was forever stuck in a land of weak economic growth that can’t exceed 3 percent ever again. However, the Trump tax reform restored incentives, money flowed back into the economy, and, as I predicted in December of 2017, in the second quarter of 2018, growth exceeded 4 percent. Overall, growth after the tax cuts exceeded the expectations of the never-growthers.

    Many of those never-growthers were in the Obama Administration. They engaged in a war on energy by increasing the costs on coal and other items. They imposed regulations throughout the economy including those that were part of Obamacare. Overall, the tax and regulatory burden on the economy rose (on top of decades of an increasing burden on the economy of taxes and regulations).

    No one should have been surprised that the economy performed so poorly under Obama. The average growth rate under Obama for his presidency was around 2 percent. That was not because he was handed a bad economy, but because, on top of that bad economy, he raised the tax and regulatory burden on the economy.

    The laws of economics doomed his program, as I predicted in July of 2008, when I said that for so long as he is president, we shall have a relatively weak economy. Why? The laws of economics.

    As the Biden Presidency begins, we know he is going to pursue the same higher tax and much higher regulatory policies of the Obama years. He is demanding a higher minimum wage and some form of a Green New deal, that is, policies that will increase the costs of energy not to mention income tax increases.

    The net result will be to increase the costs on the economy already suffering from COVID losses, and a world economy beleaguered by a huge increase in poverty. The result of the Biden policies will be weaker economic growth than what could have been. Overall, it will be yet another lesson in the laws of economics brought to us by those who don’t believe in economics.

    Thomas Del Beccaro is an acclaimed author, speaker, Fox News, Fox Business, and Epoch Times opinion writer, and former chairman of the California Republican Party. He is the author of the historical perspectives “The Divided Era” and “The New Conservative Paradigm.”

    Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

    https://www.theepochtimes.com/
     
  2. Bclick

    Bclick Elite Refuge Member

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    Not sure Trump understood it either...what did he and the uniparty rack up in new debt, 8 trillion in 4 years?

    For all the good he did he was never ever really able to operate without the swamp and even with increased revenues they kept up a nice ratio of spending twice that in their budgets.
     
    Last edited: Jan 21, 2021
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  3. Lawrence1

    Lawrence1 New Member

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    Lots of experts on the economy. I'll throw my two cents in.

    Trickle down economics doesn't work. Reagan tried it, little Bush tried it and Trump, all they do is keep the money, and why not? Nobody is going to start a business because the government gave them extra money, they're going to start a business because they see a return on their investment.

    I'm a big advocate for the middle class. When the middle class does good, that's a strong economy. The money just flows all around. Despite his rhetoric, Trump did little to nothing for the middle class. What did he tell the ultra rich when he made his tax cuts, "you all just got a lot richer". Funneling all the money to the top one percent will eventually mean there is no one left to buy their goods and services.

    Income inequality is a big problem, imo.
     
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  4. BigSkyDuk

    BigSkyDuk Elite Refuge Member

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    There is only one thing I'll say about "trickle down" economics, because no one really follows that theory any more. No one has ever gotten a job from a poor person. What Trump did was attempt (not fully successful because of the swamp) wholesale tax reform, which included rate cuts but also deduction limitations. One big problem with our tax code is the amount of "friction" it creates because of its complexity, which is born of years of special interest carve-outs and giveaways. It's one thing to cut rates, but the real action in the 2017 reform was removing complexity and reducing friction.

    As far as the middle class being the linchpin of the economy, you're spot on, but the biggest thing government can to to help the middle class is get out of the way. Quit imposing regulations that make it more difficult to create jobs. I'm going to let you in on a little secret: the rich want the middle class to do well. Why? Because the middle class buys the products and services that are created by the companies owned by the rich. But everything comes at a price, and if the government makes the cost (and risk, as we see with the Keystone XL yoyo) of entrepreneurship too high the rich are going to say screw it, and you can't blame them. If the government says you've got to pay $15/hour whether you are in Manhattan, NY or Manhattan, MT then people are going to buy a machine to take your fast food order instead of paying an employee. The article that started this thread is spot on: the laws of economics are really about human behavior and response to incentives. It has always been that way and it always will be.
     
  5. grahler

    grahler Senior Refuge Member

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    What would you do then? If you are an “advocate” for a middle class?
    I’ll tell you what I wouldn’t have done and that’s what Clinton did...
    Sellout manufacturing to overseas (China)
    Jmo you need an economy based on manufacturing things here.
    To have a nice middle class you need good manufacturing jobs, real industry, not service industry or advertising bs on you tube.
    I wouldn’t have destroyed education either but that’s another story.
    I wouldn’t just ignore borders language culture either but it’s too late now.
    What we are seeing is the final destruction of a once great nation.
    The generation that did that is dying off and the new generation is essentially dumbed down and brainwashed enough to continue the downwards spiral into communistic control.
    We are now basically a colony of China.
    Biden first orders of business?
    Claim unity while signing racist executive orders calling for preferential treatment to blacks and Latinos, shutdown a pipeline construction project eliminating tens of thousands of good jobs DAY ONE.
    The goal of this administration is to completely bankrupt the country.
    Income inequality?
    Income inequality is life. There will never be nor should there be as a goal equality of incomes across the members of society.
    There’s already equal opportunity which is what really matters...
    It really sucks that it seems the last generation with both balls and brains is dying off.
    The newer gens look to govt to solve their perceived problems when what they should be calling for is govt getting the hell outta the way in many cases.
    Govt is supposed to be there to protect our rights not control our lives
     
  6. API

    API PAF-CA Flyway Moderator

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    Indeed! Wealth is created via added value. Churning money is NOT adding value.
    Truer words never spoken.
     
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  7. OneShotBandit

    OneShotBandit Elite Refuge Member Supporting Member

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    Ahhh a newby!
     
  8. wingmatt

    wingmatt Elite Refuge Member

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    Ah, so you're a socialist. Kind of figured that. We have too much "income-redistribution" already today. It's ridiculous!!!
     
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  9. JBM SteelSlinger

    JBM SteelSlinger Senior Refuge Member

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  10. BigSkyDuk

    BigSkyDuk Elite Refuge Member

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    You can call it whatever you want. The poor and middle class create demand. The wealthy create supply.
     
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