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While economists are famous for their disagreements (and their incompetent forecasts), there is universal consensus in the profession that demand curves slope downward. That may be meaningless jargon to non-economists, but it simply means that people buy less of something when it becomes more expensive.

And this is why it makes no sense to impose minimum wage requirements, or to increase mandated wages where such laws already exist.

If you don’t understand this, just do a thought experiment and imagine what would happen if the minimum wage was $100 per hour. The answer is terrible unemployment, of course, which means it’s a very bad idea.

So why, then, is it okay to throw a “modest” number of people into the unemployment line with a “small” increase in the minimum wage?

Yet some politicians can’t resist pushing such policies because it makes them seem like Santa Claus to low-information voters. Vote for me, they assert, because I’ll get you a pay raise!

All of this sounds good, and it may even be the final result for some workers. But there’s overwhelming evidence that you get more unemployment when politicians boost the minimum wage.

There are no “magic boats.” In the real world, businesses only hire workers when they expect that additional employees will generate more than enough revenue to offset their costs. So when politicians artificially increase the cost of hiring workers, there will be some workers (particularly those with low skills) who become redundant.

And that’s exactly what we’re seeing in cities that have chosen to mandate higher minimum wages.

The Wall Street Journal opines on Seattle’s numbers.

Seattle’s increase last year seems to be reducing employment. That’s the finding of a new report by researchers at the University of Washington. The study compared nine months of 2015 in Seattle, where the wage is ticking up gradually and hit $13 an hour in January, with similar areas elsewhere in Washington. …The researchers found that the ordinance decreased the low-wage employment rate by about one-percentage point. …The ordinance “modestly held back” employment of low-wage earners, and hours worked “lagged behind” regional trends, on average four hours each quarter (or 19 minutes a week). Many such individuals moved to take jobs outside the city at “an elevated rate compared to historical patterns,” says the report. …None of this will surprise anyone who understands that increasing the cost of something will reduce the demand for it. Then again, that concept seems to elude both major presidential candidates, who have floated national minimum-wage increases.

By the way, it’s not just Trump and Clinton supporting this destructive policy. Mitt Romney also was on the wrong side back in 2012.

And it goes without saying that Obama has been a demagogue on the issue.

Sigh.

Let’s examine evidence from another city. Mark Perry of the American Enterprise Institute looks at what has been happening in Washington, DC.

Since the DC minimum wage increased in July 2015 to $10.50 an hour, restaurant employment in the city has increased less than 1% (and by 500 jobs), while restaurant jobs in the surrounding suburbs increased 4.2% (and by 7,300 jobs). An even more dramatic effect has taken place since the start of this year – DC restaurant jobs fell by 1,400 jobs (and by 2.7%) in the first six months of 2016 between January and July – that’s the largest loss of District food jobs during a 6-month period in 15 years. Perhaps some of those job losses were related to the $1 an hour minimum wage hike on July 1, bringing the city’s new minimum wage to $11.50 an hour. In contrast, restaurant employment outside the city grew at a 1.6% rate in the suburbs (and by 2,900 jobs) during the January to July period. …While it might take several more years to assess the full impact, the preliminary evidence so far suggests that DC’s minimum wage law is having a negative effect on staffing levels at the city’s restaurants. At the same time that suburban restaurants have increased employment levels by nearly 3,000 new positions since January, restaurants in the District have shed jobs in five out of the last six months, with a total loss of 1,400 jobs during that period (an average of nearly 8 jobs lost every day). The last time DC experienced restaurant job losses in five out of six consecutive months was 25 years ago in 1991, and the last time 1,400 jobs were lost over any six-month period was 15 years ago during the 2001 recession.

Here’s a chart looking at how restaurant employment in DC and the suburbs used to be closely correlated, but how there’s been a divergence since the city hiked the minimum wage.

As Mark noted, we’ll know even more as time passes, but the net result so far is predictably negative.

For additional background info, this video is a succinct explanation of why minimum-wage mandates are such a bad idea.

Let’s close with something rather amusing. It turns out that the State Department, during Hillary Clinton’s tenure, actually understood that higher minimum wages destroy jobs. Indeed, her people were even willing to fight against such job-killing measures.

But in Haiti rather than America, as Politifact reports.

Memos from 2008 and 2009 obtained by Wikileaks strongly suggest…that the State Department helped block the proposed minimum wage increase. The memos show that U.S. Embassy officials in Haiti clearly opposed the wage hike and met multiple times with factory owners who directly lobbied against it to the Haitian president. …media outlets assessed the cables and found, among many other revelations, that the “U.S. Embassy in Haiti worked closely with factory owners contracted by Levi’s, Hanes, and Fruit of the Loom to aggressively block a paltry minimum wage increase” for workers in apparel factories. …Deputy Chief of Mission David Lindwall put it most bluntly, when he said the minimum wage law “did not take economic reality into account but that appealed to the unemployed and underpaid masses.” …The U.S. Embassy, meanwhile, continued to lament the hike… USAID studies found that a 200 gourdes minimum wage “would make the sector economically unviable and consequently force factories to shut down.”

Hmmm…., I wonder if some of those textile companies made contributions to the Clinton Foundation?

P.S. People in Switzerland obviously understand this issue, overwhelmingly voting against a minimum-wage mandate in 2014.

P.P.S. As Walter Williams has explained, minimum wage laws are especially harmful for blacks.

“So many bad ideas, so little time.”

That’s my attitude about Hillary Clinton. She proposes misguided policies at such a rapid rate that I feel like I’m having to spend too much of each day trying to correct all the economic mistakes that emanate from her and her campaign.

For the fifth time over the last seven days (see other examples here, here, here, and here), I feel obliged to do it again.

Our topic is her proposal to increase handouts, subsidies, and bailouts for colleges and universities.

Here’s a brief interview I just did on the topic. Our discussion had to be abruptly ended because of what the industry calls a “hard break,” but I got out my main points that 1) subsidies benefit college bureaucracies rather than students and 2) that Hillary’s ostensible reforms will make things worse.

By the way, I can’t resist chuckling about the main assertion put forth by Alan Colmes. He thought it would be effective to point out that some of the handouts started under President George W. Bush.

But so what?!? The fact that a bad policy originated under a Republican before being expanded by a Democrat doesn’t somehow turn a pig’s ear into a silk purse.

Also, just in case you’re curious about what I was planning to say when the interview was cut off. I was going to point out that I agreed with Alan about President Bush’s role, but I was going to say that was additional evidence (given Bush’s overall statist record while president) against what Hillary is proposing.

And then, my additional point was going to be that it’s a very bad idea to allow loan forgiveness just for former students who become bureaucrats (i.e., go into “public service”). For Heaven’s sake, people who get government jobs already are getting far higher compensation than taxpayers in the private sector. Needless to say, it’s not a good idea to make a life of bureaucratic indolence even more attractive.

But let’s return to the bigger issue of why it’s misguided to have bailouts, subsidies, and handouts for higher education. If you want the opinions of a real expert on this issue, Charlie Sykes has a column on the topic in the Wall Street Journal.

Hillary Clinton’s plan for higher education is simple: a massive bailout wrapped in the promise of free tuition and relief from student loans. It’s a proposal that seems specifically designed to further inflate the higher-education bubble, while relieving the college-industrial complex of any pressure to reform. …College today costs too much, takes too long and offers dubious value to too many students. For decades, the price of a degree has risen much faster than the rate of inflation. …schools are spending more than ever on administration, promotions, athletics and noninstructional student services. The New England Center for Investigative Reporting and the American Institutes for Research found that between 1987 and 2012, colleges added 517,636 administrators and professional employees, creating a ratio at public colleges of two non-academic staffers for every full-time, tenure-track faculty member.

The current system has been bad news for students, who – thanks to subsidy-induced increases in tuition and fees – have been trapped on a treadmill.

Mr Sykes elaborates.

If the student finances the bill with loans, it’s more like buying a Lamborghini on credit—and then driving it off a cliff. Total student-loan debt has hit $1.3 trillion, according to the Federal Reserve, exceeding both the nation’s credit-card debt and its auto loans. Two-thirds of students now borrow to pay for their education, up from 45% in 1993, according to a New York Times analysis of federal data. At the end of 2014 the average student-loan borrower owed $26,700,according to analysts at the New York Fed, while 4% owed $100,000 or more.

More giveaways from government may seem like a good idea for students, but that’s only made possible by instead hurting taxpayers.

And students almost surely will suffer as well when you consider the indirect effects of this intervention.

Forgiving student debt or providing “free” tuition, with no new accountability measures, will only worsen today’s problems for future generations. The multibillion-dollar bailout Mrs. Clinton has proposed would only shift the costs of higher education to taxpayers, many of whom have not had the benefit of college. The Democratic nominee’s plan would also encourage more students to make poor educational choices by creating the illusion that college is free.

By the way, it’s very important to note that taxpayers are getting a rotten deal.

We’ve had lots more spending in recent decades, but no actual improvement in education.

Over the past five decades, billions in state and federal subsidies have contributed significantly to the exploding cost of higher education by making it easier for colleges to justify outrageous amenities. “Free” tuition will only further distort the incentives. …there is little evidence that additional spending has enhanced the value of the college degree. In a 2014 academic study of collegiate spending, economists Robert E. Martin and R. Carter Hill noted that research universities had cumulatively spent more than half a trillion dollars from 1987 to 2005. “There should be evidence of higher quality at these investment levels,” they wrote. Instead, “completion rates declined, grade inflation increased, students spend less time studying, adult numeracy/literacy rates declined, and critical thinking skills did not improve.”

Amen.

Indeed, this is exactly what we’ve seen in K-12 education.

Someone (more clever than me) needs to come up with the collegiate equivalent of this famous chart from the late Andrew Coulson.

We already know that the United States spends more per student on K-12 education than any other nation and gets mediocre results . That’s probably mostly due to the inefficient monopoly structure of elementary and secondary education.

The problems at the collegiate level are third-party payer and the inevitable negative effects of bureaucratic bloat and inefficiency.

The bottom line is that Hillary is right when she says higher-education spending is an investment. The problem is that she likes making investments that generate negative returns.

P.S. You won’t be surprised to learn that Paul Krugman also approves of investments with negative returns.

It’s not a big day for normal people, but today is exciting for fiscal policy wonks because the Congressional Budget Office has released its new 10-year forecast of how much revenue Uncle Sam will collect based on current law and how much the burden of government spending will expand if policy is left on auto-pilot.

Most observers will probably focus on the fact that budget deficits are projected to grow rapidly in future years, reaching $1 trillion in 2024.

That’s not welcome news, though I think it’s far more important to focus on the disease of too much spending rather than the symptom of red ink.

But let’s temporarily set that issue aside because the really big news from the CBO report is that we have new evidence that it’s actually very simple to balance the budget without tax increases.

According to CBO’s new forecast, federal tax revenue is projected to grow by an average of 4.3 percent each year, which means receipts will jump from 3.28 trillion this year to $4.99 trillion in 2026.

And since federal spending this year is estimated to be $3.87 trillion, we can make some simple calculation about the amount of fiscal discipline needed to balance the budget.

A spending freeze would balance the budget by 2020. But for those who want to let government grow at 2 percent annually (equal to CBO’s projection for inflation), the budget is balanced by 2024.

So here’s the choice in front of the American people. Either allow spending to grow on autopilot, which would mean a return to trillion dollar-plus deficits within eight years. Or limit spending so it grows at the rate of inflation, which would balance the budget in eight years.

Seems like an obvious choice.

By the way, when I crunched the CBO numbers back in 2010, they showed that it would take 10 years to balance the budget if federal spending grew 2 percent per year.

So why, today, can we balance the budget faster if spending grows 2 percent annually?

For the simple reason that all those fights earlier this decade about debt limits, government shutdowns, spending caps, and sequestration actually produced a meaningful victory for advocates of spending restraint. The net result of those budget battles was a five-year nominal spending freeze.

In other words, Congress actually out-performed my hopes and expectations (probably the only time in my life I will write that sentence).*

Here’s a video I narrated on this topic of spending restraint and fiscal balance back in 2010.

Everything I said back then is still true, other than simply adjusting the numbers to reflect a new forecast.

The bottom line is that modest spending restraint is all that’s needed to balance the budget.

That being said, I can’t resist pointing out that eliminating the deficit should not be our primary goal. It’s not good to have red ink, to be sure, but the more important goal should be to reduce the burden of federal spending.

That’s why I keep promoting my Golden Rule. If government grows slower than the private sector, that means the burden of spending (measured as a share of GDP) will decline over time.

And it’s why I’m a monomaniacal advocate of spending caps rather than a conventional balanced budget amendment. If you directly address the underlying disease of excessive government, you’ll automatically eliminate the symptom of government borrowing.

Which is why I very much enjoy sharing this chart whenever I’m debating one of my statist friends. It shows all the nations that have enjoyed great success with multi-year periods of spending restraint.

During these periods of fiscal responsibility, the burden of government falls as a share of economic output and deficits also decline as a share of GDP.

I then ask my leftist pals to show a similar table of countries that have gotten good results by raising taxes.

As you can imagine, that’s when there’s an uncomfortable silence in the room, perhaps because the European evidence very clearly shows that higher taxes lead to bigger government and more red ink (I also get a response of silence when I issue my challenge for statists to identify a single success story of big government).

*Congress has reverted to (bad) form, voting last year to weaken spending caps.

If you get into the weeds of tax policy and had a contest for parts of the internal revenue code that are “boring but important,” depreciation would be at the top of the list. After all, how many people want to learn about America’s Byzantine system that imposes a discriminatory tax penalty on new investment? Yes, it’s a self-destructive policy that imposes a lot of economic damage, but even I’ll admit it’s not a riveting topic (though I tried to make it culturally relevant by using ABBA as an example).

In second place would be a policy called “deferral,” which deals with a part of the law that allows companies to delay an extra layer of tax that the IRS imposes on income that is earned – and already subject to tax – in other countries. It is “boring but important” because it has major implications on the ability of American-domiciled firms to compete for market share overseas.

Here’s a video that explains the issue, though feel free to skip it and continue reading if you already are familiar with how the law works.

The simple way to think of this eye-glazing topic is that “deferral” is a good policy that partially mitigates the impact of a bad policy known as “worldwide taxation.”

Unfortunately, good policy tends to be unpopular in Washington. This is why deferral (and related issues such as inversions, which occur for the simple reason that worldwide taxation creates a huge competitive disadvantage for U.S.-domiciled companies) is playing an unusually large role in the 2016 election and concomitant tax debates.

Consider the tax controversy involving Apple. The CEO does not want to surrender money that belongs to shareholders to the government.

Apple CEO Tim Cook struck back at critics of the iPhone maker’s strategy to avoid paying U.S. taxes, telling The Washington Post in a wide ranging interview that the company would not bring that money back from abroad unless there was a “fair rate.”

Since the discussion is about income that Apple has earned in other nations (and therefore about income that already has been subject to all applicable taxes in other nations), the only “fair rate” from the United States is zero.

That’s because good tax systems are based on “territorial taxation” rather than “worldwide taxation.”

Though a worldwide tax system might not impose that much damage if a nation had a low corporate tax rate.

Unfortunately, that’s not a good description of the U.S. system, which has a very high rate, thus creating a big incentive to hold money overseas to avoid having to pay a very hefty second layer of tax to the IRS on income that already has been subject to tax by foreign governments.

Along with other multinational companies, the tech giant has been subject to criticism over a tax strategy that allows them to shelter profits made abroad from the U.S. corporate tax rate, which at 35 percent is among the highest in the developed world.

“Among”? I don’t know if this is a sign of bias or ignorance on the part of CNBC, but the U.S. unquestionably has the highest corporate tax rate among developed nations.

Indeed, it might even be the highest in the entire world.

Anyhow, Mr. Cook points out that there’s nothing patriotic about needlessly paying extra tax to the IRS, especially when it would mean a very punitive tax rate.

…a few particularly strident critics have lambasted Apple as a tax dodger. …While some proponents of the higher U.S. tax rate say it’s unpatriotic for companies to practice inversions or shelter income, Cook hit back at the suggestion. “It is the current tax law. It’s not a matter of being patriotic or not patriotic,” Cook told The Post in a lengthy sit-down. “It doesn’t go that the more you pay, the more patriotic you are.” …Cook added that “when we bring it back, we will pay 35 percent federal tax and then a weighted average across the states that we’re in, which is about 5 percent, so think of it as 40 percent. We’ve said at 40 percent, we’re not going to bring it back until there’s a fair rate. There’s no debate about it.”

Cook may be right that there’s “no debate” about whether it’s sensible for a company to keep money overseas to guard against bad tax policy.

But there is a debate about whether politicians will make the law worse in a grab for more revenue.

Senator Ron Wyden, for instance, doesn’t understand the issue. He wrote an editorial asserting that Apple is engaging in a “rip-off.”

…the heart of this mess is the big dog of tax rip-offs – tax deferral. This is the rule that encourages American multinational corporations to keep their profits overseas instead of investing them here at home, and it does so by granting them $80 billion a year in tax breaks. This policy…defies common sense. …some of the most profitable companies in the world can put off paying taxes indefinitely while hardworking Americans must pay their taxes every year. …that system creates a perverse incentive to keep corporate profits overseas instead of investing here at home.

I agree with him that the current system creates a perverse incentive to keep money abroad.

But you don’t solve that problem by imposing unconstrained worldwide taxation, which would create a perverse incentive structure that discourages American-domiciled firms from competing for market share in other nations.

Amazingly, Senator Wyden actually claims that making the system more punitive would help make America a better place to do business.

…ending deferral is a necessary step in making sure…the U.S. maintains its position as the best place to do business.

Wow, this rivals some of the crazy things that Barack Obama and Hillary Clinton have said.

Though I guess we need to give Wyden credit for honesty. He admits that what he really wants is for Washington to have more money to spend.

Ending deferral will also generate money from existing deferred taxes to pay for rebuilding our country’s crumbling infrastructure. …This is a priority that almost all tax reform proposals have called for.

By the way, can you guess which presidential candidate agrees with Senator Wyden and wants to impose full and immediate worldwide taxation?

If you answered Hillary Clinton, you’re right. But if you answered Donald Trump, that also would be a correct answer.

This is a grim example of why I refer to them as the Tweedledee and Tweedledum of statism.

Though to be fair, Trump’s plan at least contains a big reduction in the corporate tax rate, which would substantially reduce the negative impact of a worldwide tax system.

The Wall Street Journal opines on the issue and is especially unimpressed by Hillary Clinton’s irresponsible approach on the issue.

Mrs. Clinton is targeting so-called inversions, where U.S.-based companies move their headquarters by buying an overseas competitor, as well as foreign takeovers of U.S. firms for tax considerations. These migrations are the result of a U.S. corporate-tax code that supplies incentives to migrate… The Democrat would impose what she calls an “exit tax” on businesses that relocate outside the U.S., which is the sort of thing banana republics impose when their economies sour. …Mrs. Clinton wants to build a tax wall to stop Americans from escaping. “If they want to go,” she threatened in Michigan, “they’re going to have to pay to go.”

Ugh, making companies “pay to go” is an unseemly sentiment. Sort of what you might expect from a place like Venezuela where politicians treat private firms as a source of loot for their cronies.

The WSJ correctly points out that the problem is America’s anti-competitive worldwide tax regime, combined with a punitive corporate tax rate.

…the U.S. taxes residents—businesses and individuals—on their world-wide income, not merely the income that they earned in the U.S. …the U.S. taxes companies headquartered in the U.S. far more than companies based in other countries. Thirty-one of the 34 OECD countries have cut corporate taxes since 2000, leaving the U.S. with the highest rate in the industrialized world. The U.S. system of world-wide taxation means that a company that moves from Dublin, Ohio, to Dublin, Ireland, will pay a rate that is less than a third of America’s. A dollar of profit earned on the Emerald Isle by an Irish-based company becomes 87.5 cents after taxes, which it can then invest in Ireland or the U.S. or somewhere else. But if the company stays in Ohio and makes the same buck in Ireland, the after-tax return drops to 65 cents or less if the money is invested in America.

In other words, the problem is obvious and the solution is obvious.

But there are too many Barack Obamas and Elizabeth Warrens in Washington, so it’s more likely that policy will move in the wrong direction.

I’ve been accused of making supposedly inconsistent arguments against Hillary Clinton. Make up your mind, these critics say. Is she corrupt or is she a doctrinaire leftist?

I always respond with the simple observation that she’s both. Not that this should come as a surprise. Proponents of bigger government have long track records of expanding their bank accounts at the same time they’re expanding the burden of the public sector. This is true for radical leftists in places like Venezuela and it’s true for establishment leftists in places like America.

And it’s definitely true for Hillary Clinton. I shared lots of information about Hillary’s corruption yesterday, so let’s spend some time today detailing her statist policy agenda.

Consider her new entitlement scheme for childcare. As the Wall Street Journal opines, it’s even worse than an ordinary handout.

Hillary Clinton is methodically expanding her plans to supervise or subsidize those remaining spheres of human existence unspoiled by government. Mrs. Clinton rolled out her latest proposal…to make child care more affordable for working parents and also to raise the wages of child-care workers. The Democrat didn’t mention how she’d resolve the contradiction between her cost-increasing ideas and her cost-reducing ideas, though you can bet it will be expensive. …Her solution is for the feds to cap the share of a family’s income that goes toward care at 10%, with the rest of the tab covered by various tax benefits, direct cash payments and scholarships.

Her scheme to cap a family’s exposure so they don’t have to pay more than 10 percent may be appealing to some voters, but it is terrible economics.

Although we don’t have details on how the various handouts will work, the net effect surely will be to exacerbate a third-party payer problem that already is leading to childcare costs rising faster than the overall inflation rate.

After all, families won’t care about the cost once it rises above 10 percent of their income since Hillary says that taxpayers will pick up the tab for anything about that level.

There’s more information about government intervention in the editorial.

The auditors at the Government Accountability Office report that there are currently 45 federal programs dedicated to supporting care “from birth through age five,” spread across multiple agencies. The Agriculture Department runs a nursery division, for some reason. …Mrs. Clinton also feels that caregivers are paid “less than the value of their worth,” and she promises to increase their compensation. How? Why, another program of course. She’ll call it the Respect and Increased Salaries for Early Childhood Educators (Raise) Initiative, which she says is modelled after another one of her proposals, the Care Workers Initiative. …If families think day care and health care are “really expensive” now, wait until they have to pay for Mrs. Clinton’s government.

Just as subsidized childcare will be very expensive if Hillary gets elected, the same will be true for higher education.

But in a different way. The current system of subsidies and handouts gives money (in the form of grants and loans) to students, who then give the money to colleges and universities. This is a great deal for the schools, who have taken advantage of the programs by dramatically increasing tuition and fees, while also expanding bureaucratic empires.

Hillary’s plan will expand the subsidies for colleges and universities, but students apparently no longer will serve as the middlemen. Instead, the money will go directly from Uncle Sam to the schools.

Here’s some analysis from the Pope Center on Hillary’s new scheme.

Clinton has come out with a plan to make public colleges and universities free for families with earnings less than $125,000 annually by 2021. …“free” college…would depend on state governments going along with her scheme whereby the federal government would pay them if they cooperate by charging no tuition… Suppose a state decides to adopt Clinton’s free college plan. What would the consequences be? …That would mean at least a modest increase in enrollment, but it would come mainly from the most academically marginal students. The colleges and universities that gained in those enrollments would also find they need to increase remedial programs. …Another adverse result from making college tuition free would be that many students would devote less effort to their courses. …Federal Reserve Bank of New York economist Aysegul Sahin…studied the effort college students put into their work in a 2004 paper“The Incentive Effects of Higher Education Subsidies on Student Effort.” She concluded, “Low-tuition, high-subsidy policies cause an increase in the ratio of less highly-motivated students among the college graduates and that even highly-motivated ones respond to lower tuition by choosing to study less.”

As with much of Hillary’s agenda, we don’t have full details. I strongly suspect that colleges and universities will have a big incentive to jack up tuition and fees to take advantage of the new handout, though I suppose we have to consider the possibility (fantasy?) that the plan will somehow include safeguards to prevent that from happening.

Oh, and don’t forget all the tax hikes she’s proposing to finance bigger government.

The really sad part about all this is that her husband actually wound up being one of the most market-oriented presidents in the post-World War II era. I’ve written on this topic several times (including speculation on whether the credit actually belongs to the post-1994 GOP Congress).

Is it possible that Hillary decides to “triangulate” and move to the center if she gets to the White House?

Yes, but I’m not brimming with optimism.

The Wall Street Journal has some depressing analysis on Bill Clinton vs Hillary Clinton.

…the Obama-era Democratic Party has repudiated the Democratic Party’s Bill-era centrist agenda. They now call themselves progressives, not New Democrats… The Clinton contradiction is that she claims she’ll produce economic results like her husband did with economic policies like Mr. Obama’s.

The editorial looks at Bill Clinton’s sensible record and compares it to what Hillary is proposing.

His wife wants to nearly double the top tax rate on long-term cap gains to 43.4% from 23.8%, in the name of ending “quarterly capitalism.” That’s higher than the 40% rate under Jimmy Carter, and she’d also impose a minimum tax on millionaires and above, details to come. …Mrs. Clinton has repudiated the Trans-Pacific Trade Partnership that she had praised as Secretary of State. …She wants to extend Dodd-Frank regulation to nonbanks, and she promises to entrench Mr. Obama’s anticarbon central planning at the EPA and expand ObamaCare with price controls on new medicines. …Mrs. Clinton is proposing to impose many more such work disincentives. She’ll bestow tax credits on everything from child care to elderly care, from college tuition to businesses that share profits with workers. To the extent her new mandates for family leave, the minimum wage, overtime and “equal pay” increase the cost of labor, she’ll drive more Americans out of the workforce. Oh, and…Mrs. Clinton wants to “enhance” Social Security benefits and make Medicare available to pre-retirees.

I’ve already written about her irresponsible approach to Social Security.

And I also opined on the issue in this interview.

The bottom line is that we’re in a very deep hole and Hillary Clinton, simply for reasons of personal ambition, wants to dig the hole deeper. As I remarked in the interview, she’s akin to a Greek politician agitating for more spending in 2007.

Given all this, is anyone surprised that “French President Francois Hollande endorsed Hillary Clinton”? What’s next, a pro-Hillary campaign commercial featuring Nicolas Maduro? A direct mail piece from the ghost of Che Guevara?

Back in 2009, I shared some academic research showing the unsavory link between lobbying expenditures and bailout cash from TARP.

Just in case anybody naively thinks that such distasteful favor-swapping no longer occurs, here’s some more evidence. A column in the International Business Times summarizes some new scholarly research, once again showing the corrupt nexus between big government and the financial sector.

…analysis from London Business School professors Ahmed Tahoun and Florin Vasvari analyzed how the personal finances of congressional lawmakers changed once they were appointed to the Senate Finance Committee, the Senate Banking Committee or the House Financial Services Committee. It also evaluated how their finances compared with other lawmakers who are not on those panels. …the researchers found that finance committee members’ personal borrowing tended to jump in the first year they were appointed to the panels — a trend not seen for other lawmakers who were given seats on other powerful committees. Similarly, the data show that upon joining the finance panels, lawmakers tended to be given 32 percent more time — or on average 4 and a half years more — to pay back those new debts than loans they previously had and that other members of Congress have. The study found that lawmakers also “report more favorable debt terms when they join the finance committee, relative to other years and to the terms other congressional members obtain including those on other powerful committees.”

Needless to say, the companies aren’t giving special treatment to these politicians because of altruism. For every quid, there’s a quo.

…the influence may operate in the other direction, too. Looking at which particular financial institutions are lending to lawmakers, the researchers found that underperforming banks provided new — and bigger — loans to more finance committee members than to other Members of Congress. They say that because those firms could face more regulatory scrutiny and financial instability from new federal policies, they are more reliant on strong political connections than competitors that are in better shape.

In other words, if you can’t succeed by competing in the marketplace, then curry favor with politicians so that you can be propped up by big government.

Though companies presumably have learned from the Countrywide scandal to be more cautious about disguising the fact that they are dispensing goodies.

…mortgage industry titan Countrywide Financial created a “VIP loan unit” that gave lower mortgage rates and expedited loan processing services to lawmakers that oversaw legislation affecting the firm. …Democratic U.S. Senators Chris Dodd and Kent Conrad were cleared by the ethics committee, which said they did not knowingly seek the perks. The committee, though, told the lawmakers they “should have exercised more vigilance in your dealings with Countrywide in order to avoid the appearance that you were receiving preferential treatment based on your status as a senator.”

By the way, I’m not exactly shocked that the congressional ethics committee (wow, talk about an oxymoron) didn’t even bother slapping the wrists of the politicians who got the favors. After all, imagine how much harder it would be to raise campaign cash if politicians couldn’t use the coercive power of government to swap favors with interest groups.

But the folks on Capitol Hill are amateurs compared to Bill and Hillary Clinton. The Wall Street Journal explains that the charity they set up has basically been a scam to advance their personal and political interests.

The foundation served for years as a conduit for corporate and foreign cash to burnish the Clinton image, pay for their travel expenses for speeches and foreign trips, and employ their coterie in between campaigns or government gigs. Donors could give as much as they wanted because the foundation is a “charity.” …the foundation promised the White House when Mrs. Clinton became Secretary of State that the foundation would restrict foreign donations and get approval from the State Department. It turned out the foundation violated that pledge, specifically when accepting $500,000 from Algeria. The foundation also agreed to disclose donor names but failed to do so for more than 1,000 foreign donors until the failure was exposed by press reports.

Some readers may think it doesn’t matter where the money came from. What really counts is that the Clinton Foundation used the money to make the world a better place, right?

Um, not exactly. Only pennies on the dollar were used for charitable purposes.

The rest of the money was a slush fund to finance the Clinton family’s political machinery.

If you think this sounds unfair to the Clinton Foundation, you may change your mind after reading this article from the Daily Caller. Here are some excerpts.

Clinton Foundation officials have ignored virtually all of the “best practices” urged by good governance organizations for public charities… Most glaringly, for example, the foundation’s insular board of directors…are among President Bill and Hillary Clinton’s closest and richest friends. The “good governance” movement in the nonprofit field has been gathering strength for two decades, but it clearly has yet to reach the Clinton Foundation. …Good governance groups also encourage well-managed non-profits to create dedicated oversight committees… The Clinton Foundation has none of those committees, according to its Internal Revenue Service 990 tax filings. …the Clinton Foundation spent $12.6 million on Bill Clinton’s 60th birthday party. The foundation recorded the expense as “fundraising expenses.” …In December 2014 the board approved a $395,000 pay package for Braverman to become the new CEO.  But the next month he abruptly resigned. Politico reported that Clinton’s insular staff were appalled at Braverman’s attempts at reforms. Braverman never explained the reasons for his departure. But Politico believes it was a backlash from Bill and Hillary’s hardened loyalists and “mega-donors” who chafed at the notion of more openness and transparency.

If the Clinton Foundation was a truly private organization, it wouldn’t be anybody’s business whether how it operated.

Moreover, it would be hypocritical for me to make that accusation. After all, I’m on the Board of the pro-tax competition Center for Freedom and Prosperity and the other Board members are long-time friends. And we don’t have a bunch of oversight committees since CF&P’s annual budget has averaged less than $200,000, which means such things don’t seem necessary (though we’ve managed to do a lot with a little, even earning a front-page attack from the Washington Post).

The real issue, however, is whether a nonprofit organization is genuinely private. In the case of the Clinton Foundation, ” the organization seemingly operated as a “pay-to-play” gatekeeper for goodies from the State Department?

Consider these blurbs from a column in the Wall Street Journal.

…more than two dozen companies and groups and one foreign government paid former President Bill Clinton a total of more than $8 million to give speeches around the time they also had matters before Mrs. Clinton’s State Department, according to a Wall Street Journal analysis. Fifteen of them also donated a total of between $5 million and $15 million to the Bill, Hillary and Chelsea Clinton Foundation, the family’s charity… In several instances, State Department actions benefited those that paid Mr. Clinton.

Here’s one of the examples discussed in the column.

…the capital of the United Arab Emirates asked for a facility to clear travelers for U.S. entry before they boarded planes so they could avoid delays when arriving in the U.S. …U.S.-based airlines, which have no direct flights between Abu Dhabi and the U.S., opposed the idea as a giveaway to the government-owned airline, Etihad Airways. …While Mrs. Clinton’s State Department and the Department of Homeland Security were working out a “letter of intent” with Abu Dhabi for the facility, Mr. Clinton sought permission to give a paid speech in Abu Dhabi. …On Dec. 6, 2011, U.S. officials signed the letter of intent. One week later, Mr. Clinton gave a 20-minute talk on climate change to the Abu Dhabi government environmental gathering. He collected $500,000, his wife’s disclosure report shows. In December 2012, Mr. Clinton sought approval for another speech in Abu Dhabi before the World Travel and Tourism Council…the speech was sponsored by three Abu Dhabi tourism agencies, all owned by the government. …Mr. Clinton gave a keynote address on the value of tourism. He was paid $500,000, his wife’s disclosure filings say. One week later, the U.S. and Abu Dhabi signed the final agreement for the facility. …Mrs. Clinton’s spokesman said it was “farcical” to suggest any connection between the speeches and the facility’s opening.

The “farcical” part of this is the notion that a) Bill Clinton is an expert on the “value of tourism”, and b) that his supposed expertise on the topic is worth $500,000.

Though I have to give Bill Clinton credit for getting good deals. When I give a speech, I’m content with simply getting the organizer to pay for a coach ticket and a hotel room.

But the L.A. Times reveals that Bill Clinton gets much better treatment, not even counting the giant piles of money funneled to the Clinton Foundation.

Clinton changed the rules of political speech-making for cash. He would push not just corporate hosts but also nonprofits and universities to pay fees well beyond what they were accustomed to. …He and Hillary Clinton would become so skilled at churning profits out of their lectures that they would net more than $150 million from speaking alone after he left the White House. …refusing questions that were not screened by his staff in advance. There is the nearly $1,400 bill for a day’s worth of phone calls from San Francisco’s Fairmont Hotel and the $700 dinner for two. …Clinton would demand in his contract to be shuttled by private jet from San Francisco to UC Davis, where he spoke at the Mondavi Center. The center had to appeal to its network of donors to find someone able to fly him the 70 miles, something it had never done and hasn’t since.

By the way, I don’t object to Bill Clinton being treated far better than me. But I do get agitated if he’s getting goodies because some interest group is participating in a pay-for-play scam based on favors from government.

And that does come out of my pocket, as well as from the pockets of every other taxpayer, consumer, and worker.

Speaking of pay-to-play, here’s a story from the Washington Examiner about some unseemly behavior from the Clinton Foundation.

A Clinton Foundation official asked an aide to then-Secretary of State Hillary Clinton if the government would allow the well-connected charity to accept a donation from an oil company with extensive ties to Iran. …The email shows Petronas, a Malaysian state-owned oil company, wanted to send CEO Shamsul Azhar bin Abbas to a Clinton Global Initiative event as a paying member. …Two months earlier, the State Department highlighted a $150 million contract between Petronas and General Electric in Malaysia. …David Bossie, president of Citizens United, said the timeline of the State Department’s announcement of the deal with GE should raise questions. “A month after the announcement, the Clinton Foundation staff is contacting the State Department saying, ‘Hey, we want to shake down the CEO, essentially, of Petronus, is that ok?’…,” Bossie said. “That is political crony capitalism — that’s the definition of it, is using your political contacts and your political achievements for financial gain for the foundation,” he continued. “Clearly, [there was] a conflict of interest.”

The only good news is that the proposed shakedown of Petronas apparently didn’t happen, though it’s unclear from the records whether this was because the company said no or because the idea was so over-the-top corrupt that it was rejected by the State Department.

Let’s close with a really nauseating example of Clintonian sleaze. A story in National Review exposes how the family’s Foundation victimized the people of Haiti.

Their story goes back to 2010, when a massive 7.0 earthquake devastated the island, killing more than 200,000 people, leveling 100,000 homes, and leaving 1.5 million people destitute. The devastating effect of the earthquake on a very poor nation provoked worldwide concern and inspired an outpouring of…some $10.5 billion in aid, with $3.9 billion of it coming from the United States.

But all this money hasn’t helped the poor people of Haiti.

…very little of this aid money actually got to poor people in Haiti. …Port-au-Prince was supposed to be rebuilt; it was never rebuilt. Projects aimed at creating jobs proved to be bitter disappointments. Haitian unemployment remained high, largely undented by the funds that were supposed to pour into the country. Famine and illness continued to devastate the island nation.

Why didn’t all the money have a positive impact?

Part of the answer is that foreign aid generally ineffective. Another part of the answer is that Haiti has statist policies that inhibit growth and prosperity.

But a final part of the answer is that a bunch of grifters diverted the money to their own pockets.

Where did it go? …Bill Clinton was the designated UN representative for aid to Haiti. …his wife Hillary was the United States secretary of state. She was in charge of U.S. aid allocated to Haiti. …an interesting pattern involving the Clintons and the designation of how aid funds were used. …a number of companies that received contracts in Haiti happened to be entities that made large donations to the Clinton Foundation. …For example, the Clinton Foundation selected Clayton Homes, a construction company owned by Warren Buffett’s Berkshire Hathaway, to build temporary shelters in Haiti. Buffett is an active member of the Clinton Global Initiative who has donated generously to the Clintons as well as the Clinton Foundation. …the contract was never competitively bid for. Clayton offered to build “hurricane-proof trailers” but what they actually delivered turned out to be a disaster. The trailers were structurally unsafe, with high levels of formaldehyde and insulation coming out of the walls. There were problems with mold and fumes. The stifling heat inside made Haitians sick and many of them abandoned the trailers because they were ill-constructed and unusable.

Here’s another example of pay-to-play favoritism.

The Clintons also funneled $10 million in federal loans to a firm called InnoVida, headed by Clinton donor Claudio Osorio. …Normally the loan approval process takes months or even years. …InnoVida had not even provided an independently audited financial report that is normally a requirement for such applications. This requirement, however, was waived. On the basis of the Clinton connection, InnoVida’s application was fast-tracked and approved in two weeks. The company, however, defaulted on the loan and never built any houses. An investigation revealed that Osorio had diverted company funds to pay for his Miami Beach mansion, his Maserati, and his Colorado ski chalet.

Gee, isn’t government a great racket!

Here’s one final oleaginous example.

In 2011, the Clinton Foundation brokered a deal with Digicel, a cell-phone-service provider seeking to gain access to the Haitian market. The Clintons arranged to have Digicel receive millions in U.S. taxpayer money to provide mobile phones. The USAID Food for Peace program, which the State Department administered through Hillary aide Cheryl Mills, distributed Digicel phones free to Haitians. Digicel didn’t just make money off the U.S. taxpayer; it also made money off the Haitians. When Haitians used the phones, either to make calls or transfer money, they paid Digicel for the service. Haitians using Digicel’s phones also became automatically enrolled in Digicel’s mobile program. By 2012, Digicel had taken over three-quarters of the cell-phone market in Haiti. Digicel is owned by Denis O’Brien, a close friend of the Clintons. O’Brien secured three speaking engagements in his native Ireland that paid $200,000 apiece. These engagements occurred right at the time that Digicel was making its deal with the U.S. State Department. O’Brien has also donated lavishly to the Clinton Foundation, giving between $1 million and $5 million sometime in 2010–2011. Coincidentally the United States government paid Digicel $45 million to open a hotel in Port-au-Prince.

If you’re not thoroughly nauseated, read the entire article for many more examples of pay-to-play sleaze.

By the way, I’m not merely picking on the Clintons. Yes, they seem to be remarkably amoral in their approach to politics, but the underlying problem is that big government enables corruption regardless of who is in charge.

That’s the moral of the story.

P.S. Don’t forget that the Clinton Foundation easily got approved by the IRS while innocuous Tea Party groups were stonewalled. Another typical example of government in action.

I’m sometimes guilty of repeating myself. I write over and over again on topics such as the flat tax and spending caps (and don’t forget my Golden Rule!), though I hope each time I bring something new to the discussion.

Another issue that motivates me is the debate about inequality, redistribution, and growth. I get all agitated and can’t resist trying to debunk statist claims that we should focus on re-slicing the pie rather than expanding the pie.

Here are just a few examples.

The invaluable Scott Winship makes the same argument in the Washington Post, but does it much better.

He starts with some very solid observations about why inequality doesn’t matter.

Changes to the tax code certainly could reduce inequality, but the real question is whether we should try to reduce it. There is little evidence that we should. …Across developed countries, those with higher inequality have slightly higher middle-class incomes and less poverty. …Areas of the United States with more income concentration at the top have no worse mobility than areas with low inequality. The same is true across countries — the best research indicates that low-inequality Sweden is no more mobile than the United States. …studies by experts including Thomas Piketty and Emmanuel Saez indicate that countries with higher inequality growth tend to have higher economic growth too. …Prioritizing inequality betrays indifference to policy outcomes and pure antipathy toward top earners.

And he then pivots and spends some time explaining why the focus should be on growth (assuming, of course, that the goal is actually to improve the lives of poor people rather than merely to punish the rich).

…nothing helps the poor and middle class like economic growth, and that is best pursued by policy reforms that ignore inequality. To promote growth, the next president should abolish corporate taxes and reform individual taxes… She should promote state and local reform of occupational licensing and land-use regulation. She should reform entitlements, including Obamacare, and reorient immigration policy in favor of admitting more higher-skilled and less lower-skilled immigrants. She should pursue a deregulatory agenda… Unfortunately, the distraction of inequality — or nationalism — makes it unlikely the next president will pursue any of these policies, and the poor and middle class will be worse off for it.

At this point, I imagine that some of my statist friends are sputtering and stammering to themselves about the new narrative, very popular on the left, about inequality harming growth.

I’ve already exposed the very shoddy attempts by political types at the OECD and IMF to push this ideologically-based talking point.

But what about the supposedly path-breaking work of Thomas Piketty? Didn’t he somehow produce game-changing data in support of higher taxes and more redistribution?

Nope. He basically showed that rich people are rich, which isn’t a stunning revelation. More controversially, he wanted people to conclude that rich people being rich somehow caused poor people to be poor.

And the theory he concocted to ostensibly “prove” his argument is so outlandish (basically assuming the return on investment is always greater than the underlying rate of growth) that only 2 percent-3 percent of economists are willing to “agree” or “strongly agree” with his premise.

For those who care more about empirical data rather than theory, you may be interested in a new working paper from one of the professional economists at the IMF. Carlos Góes finds that there’s no evidence for Piketty’s hypothesis.

Piketty…argues that all other things constant, whenever the difference between the returns on capital (r) and the output growth rate (g) increases, the share of capital in national income increases. Furthermore, since capital income tends to be more unequally distributed than labor income, an increase of the capital share would likely lead to increased overall income (and, over time, wealth) inequality. …I find no empirical evidence that the dynamics move in the way Piketty suggests. In fact, for at least 75% of the countries examined, inequality responds negatively to r − g shocks, which is in line with previous single-equation estimates by Acemoglu and Robinson (2015). The results also suggest that changes in the savings rate, which Piketty takes as relatively stable over time, are likely to offset most of the impact of r − g shocks on the capital share of the national income. Thus, it provides empirical evidence to the model developed by Krusell and A. Smith (2015), who say Piketty relies on flawed theory of savings. The conclusions are robust to alternative estimates of r − g and to the exclusion or inclusion of tax rates in the calculation of the real return on capital. …Figure 2 plots the contemporaneous correlations between r−g spreads and capital share, and share of the top 1%. Such basic correlations show no evidence of the relationship Piketty poses.

And here is the aforementioned Figure 2, with the capital share shown on the left and the share of the top 1 percent on the right.

For those who don’t like a lot of economic jargon (or don’t like looking at eye-glazing charts), here’s how the study was summarized in a report for the Wall Street Journal.

Mr. Piketty hypothesized that income inequality has risen because returns on capital—such as profits, interest and rent that are more gleanings of the rich than the poor—outpaced economic growth. …But Mr. Piketty’s thesis, posed by the French economist in his controversial 2013 tome “Capital in the Twenty-First Century,” isn’t proved by historical data, says International Monetary Fund economist Carlos Góes. …“While rich in data, the book provides no formal empirical testing for its theoretical causal chain.” Mr. Góes tested the thesis against three decades of data from 19 advanced economies. “I find no empirical evidence that dynamics move in the way Piketty suggests.” In fact, for three-quarters of the countries he studied, inequality actually fell when capital returns accelerated faster than output. Those findings support previous work by Daron Acemoglu of the Massachusetts Institute of Technology and political scientist James Robinson, now of the University of Chicago, suggesting Mr. Piketty’s thesis was far too simplistic… Why does all this matter? Because if policy makers seeking to address inequalities misunderstand the problem, their solutions could be wrong, ineffective and costly. Based on his inequality theory, Mr. Piketty has proposed progressive wealth taxes, a measure some economists argue could harm economic growth.

Amen. You don’t make poor people rich by trying to make rich people poor.

Unfortunately, I suspect (as Margaret Thatcher sagely observed) that a lot of leftists are more motivated by animus against success than they are about genuine concern for the poor.

That being said, some people do benefit from the pursuit of class-warfare policy. The College Fix discusses a new report about how some of the people who advocate higher taxes and more redistribution have figured out how to redistribute big chunks of money from taxpayers to themselves.

Several UC Berkeley economics professors who support “income inequality” research each earn more than $300,000 a year, putting them in the top 2 percent of the public university’s salary distribution, according to a recent report by a nonpartisan California think tank. …Cal’s equitable growth center’s director, economics Professor Emmanuel Saez, earned an annual salary of just under $350,000. The center’s three advisory board members – all economics professors – made similar amounts: Professor David Card made $336,367 in 2014; Professor Gerard Roland took in $304,608; and Professor Alan Auerbach earned $291,782. That’s not even including their pensions — equal to 2.5 percent times their final average salary times the number of years employed. …Another vocal income inequality expert at UC Berkeley, Professor Robert Reich – former secretary of labor under Bill Clinton’s administration who in 2013 helped produce the film “Inequality for All” – earned $263,592 in 2014, the think tank’s report states.

The article closes with a suggestion that I think will fall upon deaf ears.

…the report concluded. “So if UC Berkeley economists are really opposed to income inequality and are concerned about low-paid workers, they might consider sharing some of their compensation with the teaching assistants, graders, readers and administrative staff at the bottom of Cal’s income distribution.”

By the way, I strongly suspect that Thomas Piketty hasn’t given away all the money he earned from the infamous book he produced in defense of class warfare. Shouldn’t he lead by example?

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