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Archive for October, 2016

At the start of the year, I argued that capitalism was the way to get more growth in poor nations.

Foreign aid, by contrast, hasn’t worked very well.

…there’s a big difference between good intentions and good results. If you examine the evidence, it turns out that redistribution from rich nations to poor nations is just as counterproductive as redistribution within a society.

But don’t believe me. Professor William Easterly of NYU spent many years at the World Bank working on issues relating to economic development and he’s written entire books on the failure of foreign aid.

And here’s some of what he wrote for Cato back in 2006.

The West’s efforts…have been even less successful at goals such as promoting rapid economic growth, changes in government economic policy to facilitate markets, or promotion of honest and democratic government. The evidence is stark: $568 billion spent on aid to Africa, and yet the typical African country no richer today than 40 years ago. Dozens of “structural adjustment” loans (aid loans conditional on policy reforms) made to Africa, the former Soviet Union, and Latin America, only to see the failure of both policy reform and economic growth. The evidence suggests that aid results in less democratic and honest government, not more. …Economic development happens, not through aid, but through the homegrown efforts of entrepreneurs and social and political reformers. While the West was agonizing over a few tens of billion dollars in aid, the citizens of India and China raised their own incomes by $715 billion by their own efforts in free markets.

One of the best critiques of foreign aid was written by an Indian back in 1972. The late Minoo Masani, who began his political career as a believe in socialism, learned through experience that markets work better than handouts.

…government-to-government aid distorts the international division of labour. It comes in the way of the natural laws of the market which should decide which country should produce what. …Government-to-government loans encourage socialism, communism and Statism, concentration of power, and waste. When a government aids another government, who disburses that aid? The government of that country. Aid thus transfers economic power from the people, the industrialists, the businessmen and the people to the hands of bureaucrats and politicians. The patronage the politician can dispense increases; the politicisation of economic life goes on. So, in a very direct way, every rupee of aid given by America or any other country or the World Bank to any aided country, including India, directly strengthens the forces of Statism, socialism and communism and weakens the forces of people’s free enterprise. It also breeds irresponsibility and waste.

He makes a great point that it is private investment that produces sustainable growth, not government-to-government transfers.

…one of the greatest disadvantages of government-to-government aid is that it discourages the investment of private equity capital in these countries. It does so because when one gets government-to-government aid at cheap rates, the temptation is not to raise equity capital abroad. This is a pity because our countries need foreign equity capital desperately. When foreign capital comes into India from any part of the world, it brings in foreign plant or machinery and engages Indian labour to work on it. It takes its profits out of the country only when it makes a profit. So such investment is in the interests of the Indian people. When a government-to-government loan comes, we have to repay the capital and the interest to the foreign government, however badly the money may have been wasted by our government. This is against the interests of the Indian people. So foreign private equity capital is good for India; government-to-government loans are bad for India. Let us hope we shall be spared them from now on.

Let’s look at some real-world evidence from the modern era.

In her recent Wall Street Journal column, Mary Anastasia O’Grady explains how aid has stifled the private sector in Haiti.

…why are so many Haitians still living in such dire poverty in the 21st century? Paradoxically, the answer may be tied to the way in which humanitarian aid, necessary and welcome in an emergency, easily morphs into permanent charity, which undermines local markets and spawns dependency. …The trouble is their assumption, too often, that poverty is caused by a lack of money or resources. This produces the wrong solution, one that prescribes getting as much free stuff to the target economy as possible. …The country has also been the recipient of billions of dollars in foreign-government bilateral and multilateral aid over the last quarter century. This enormous giving has created harmful distortions in the local economy because when what would otherwise be traded or produced by Haitians is given away, it drives entrepreneurs out of business.

Mary shares a couple of concrete examples.

The country was once self-sufficient in rice thanks to the work of rural peasants. That changed, according to the testimony of one development expert in the film, in the early 1980s. That’s when Haiti opened its rice market and the U.S. began dumping subsidized grain in the country with the goal of ending hunger—and helping Arkansas rice growers with U.S. taxpayer money. Most Haitian farmers could not compete with Uncle Sam’s generosity, and they lost their customers. …Donations of bottled water, clothing, shoes and even solar panels destroy local businesses in the same way. Just ask Jean-Ronel Noel, who co-founded the solar-panel company Enersa in his garage in the mid-2000s and expanded it to more than 60 employees. He is proud of his workforce…comes mainly from Port-au-Prince’s notorious slums. …The company was doing a robust business until the 2010 earthquake. “After the earthquake we were competing mostly against NGOs . . . coming with their solar panels . . . and giving them away for free. So what about local businessmen?” As Alex Georges, Mr. Noel’s partner puts it, “The demand stopped because it’s hard to compete with free.”

And here is the problem from a national and cultural perspective.

Mr. Noel zeroes in on another related problem: “Those NGOs are changing the mentality of the people. Now you have a generation with a dependency mentality.”

In other words, handouts from rich nations are destroying the social capital of Haiti.

Let’s go back to 2009 and see what Dambisa Moyo wrote about foreign aid to her home continent.

Kibera, the largest slum in Africa…is…just a few yards from…the headquarters of the United Nations’ agency for human settlements… Kibera festers in Kenya, a country that has one of the highest ratios of development workers per capita. …Giving alms to Africa remains one of the biggest ideas of our time — millions march for it, governments are judged by it, celebrities proselytize the need for it. Calls for more aid to Africa are growing louder, with advocates pushing for doubling the roughly $50 billion of international assistance that already goes to Africa each year. Yet evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It’s increased the risk of civil conflict and unrest… Aid is an unmitigated political, economic and humanitarian disaster.

She has some very grim numbers.

…aid can provide band-aid solutions to alleviate immediate suffering, but by its very nature cannot be the platform for long-term sustainable growth. …Over the past 60 years at least $1 trillion of development-related aid has been transferred from rich countries to Africa. Yet real per-capita income today is lower than it was in the 1970s, and more than 50% of the population — over 350 million people — live on less than a dollar a day, a figure that has nearly doubled in two decades. …The most obvious criticism of aid is its links to rampant corruption. Aid flows destined to help the average African end up supporting bloated bureaucracies in the form of the poor-country governments and donor-funded non-governmental organizations. …A constant stream of “free” money is a perfect way to keep an inefficient or simply bad government in power.

If foreign aid money was “merely” wasted, that would be a bad outcome.

But that’s the optimistic version of the story.

In reality, the evidence suggests that these handouts actually subsidize bad policy in the developing world.

None of this would surprise the late Peter Bauer.

Lord Bauer was famous for observing that “government-to-government transfers . . . are an excellent method for transferring money from poor people in rich countries to rich people in poor countries.”

That’s good, if you happen to be a third world kleptocrat and you have a nice bank account filled with stolen funds in New York.

But if you’re a poor person in a poor country, you’re the one victimized by a bigger government that’s riddled with more corruption.

Amazingly, many western politicians accept corruption as the price of giving away money.

But this brings me back to where we started. If foreign aid achieved good results, then there would be a utilitarian case for accepting a degree of waste and corruption.

But since the evidence shows that these programs lead to slower growth and less prosperity, it’s a lose-lose-lose situation.

Here’s a video trailer for a great documentary on how foreign aid is helpful, but only for the people in charge of the programs.

Let’s close with something that probably should be called Bauer’s Paradox since I’m almost sure he said something making this point.

But until I find proof (maybe it was Easterly or some other scholar), we won’t attribute this sentiment to anyone in particular. We’ll simply go with a rather anodyne title.

But even if the title is boring, this Paradox makes a critical point. The poor nations that have become rich nations in recent decades did not rely on handouts and redistribution.

Instead, they generated growth by limiting the size and scope of government while allowing markets to function.

The nations that got the most aid, however, have stayed relatively poor.

P.S. The foreign aid bureaucrats and contractors have been the only real beneficiaries, much as the “poverty pimps” are the only real beneficiaries of the failed War on Poverty.

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The horrid day is rapidly approaching. Yes, November 8 is when Americans will choose which Tweedledee/Tweedledum fire to jump into after two terms of Barack Obama’s slow-growth frying pan.

So let’s try to enjoy some gallows humor in advance

Hillary already has been the target of satire in one Nazi movie. This time she’s graduated to a Nazi movie featuring the head of the National Socialist Workers Party.

Speaking of Ms. Clinton, I can greatly sympathize with the disgust she felt when receiving this selfie from America’s laughingstock, Anthony Weiner.

Now let’s train our fire on one of Hillary’s long-time donors and supporters.

Here’s Doc Brown giving some very important instruction on how to save the nation from the big-government fake Republican who is running against the big-government all-too-real Democrat.

We even have some satire mocking the Libertarian nominee. Here are some excerpts from an article posted by the Onion, ostensibly written by Gov. Gary Johnson.

…there is a once-in-a-lifetime opportunity here for a third-party candidate to present a transformative new vision for our nation and win the support of voters all across the country. And frankly, I am just as disappointed as you are to realize I am in no way qualified to do that. …As it turns out, though, being a high-profile presidential candidate requires you to do a lot of stuff you don’t have to do when you’re only pulling in 1 percent of the vote, like know all about foreign affairs and domestic policy. …as you can probably tell by now, I am simply not up to the task. Not even close. …I’ve had to field questions on all kinds of subjects I just don’t have any clue about. It’s actually been pretty embarrassing. …What makes it really disappointing is that I truly believe libertarianism has valuable ideas to contribute to America’s political discourse. …But boy oh boy, am I ever doing a shitty job of communicating all that.

For what it’s worth, I suspect most Americans are relieved that Gary Johnson doesn’t know about places like Aleppo. That way, he’s less likely to invade and cause more instability and anti-American radicalism in the Middle East.

P.S. If you enjoyed the Hitler parody, other examples of this genre include:

And you can find more Hillary and/or Trump humor here, here, and here.

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In just 10 days, voters will go to the polls and deal with the rather distasteful choice of Donald Trump and Hillary Clinton.

In some states, they also will have an opportunity to vote for or against various ballot initiatives and referendums.

Here are the five proposals that would do the most damage in my humble opinion.

ColoradoCare (Amendment #69) – Apparently learning nothing from what happened in Vermont, advocates of big government in Colorado have a proposal to impose a 10 percent payroll tax to finance statewide government-run healthcare. The Tax Foundation points out that, if this scheme is approved, Colorado’s score in the State Business Tax Climate index “would plummet from 16th overall to 34th,” while the Wall Street Journal opines that “California would look like the Cayman Islands by tax comparison” if Colorado voters say yes.

Oregon Gross Receipts Tax (Measure #97) – Back in 2010, presumably guided by the notion that it’s okay to steal via majoritarianism, Oregon voters approved a class-warfare tax hike on upper-income taxpayers. Now they’re about to vote on a scheme to pillage the state’s businesses with a gross receipts tax, which is sort of like a value-added tax but with no credit for taxes paid earlier in the production process, which means the burden “pyramids” as goods and services are created. The Tax Foundation warns that this levy could lead to “a 25 percent increase in the Oregon state budget” and that “Oregon’s corporate tax climate would be the worst in the nation.”

Maine Income Tax Hike (Question #2) – Voters are being asked whether to boost the state’s top income tax rate to 10.15, which would be the second-highest in the nation. According to the Tax Foundation, the Pine Tree State “would drop to 45th overall” in the State Business Tax Climate Index (down from #30) if this class-warfare scheme is enacted. The National Taxpayers Union warns that the ” tax would make the state a less competitive place in which to do business.”

Oklahoma Sales Tax Increase (Question #779) – Sales taxes don’t do as much damage, per dollar raised, as income taxes, but it’s still a foolish idea to impose a big tax hike in order to finance bigger government. And that’s what will happen if voters in the state agree to boost the state sales tax by one-percentage point. The Tax Foundation notes that “Question 779 would give the Sooner State the second highest combined state and local sales tax rate in the nation, after only Louisiana.

California Tax-Hike Extension (Proposition #55) – One of worst ballot initiatives in 2012 was California’s Proposition 30, which imposed a big, class-warfare tax hike on upper-income residents and gave the Golden State the nation’s highest income tax rate. One of the arguments in favor of Prop 30 was that the tax increase was only temporary, lasting until the end of 2018. Well, as Milton Friedman famously observed, there’s nothing so permanent as a temporary government program. And that apparently applies to “temporary” taxes as well.  Proposition #55 would extend the tax until 2030.

Unfortunately, there aren’t a lot of ballot initiatives that would move policy in the right direction. Here’s the one that probably matters most.

Massachusetts Charter Schools (Question #2) – Much to the dismay of teacher unions (and presumably the hacks at the NAACP as well), this initiative would expand charter schools. It’s remarkable that even the very left-leaning Boston Globe is embracing Question 2, opining that “the proposal would create new opportunities for the 32,000 students, predominantly black and Latino, who are now languishing on waiting lists hoping for a spot at a charter school” and that “Students in all Massachusetts charter schools gain the equivalent of 36 more days of learning per year in reading and 65 more days of learning in math.”

A related measure is Amendment #1 in Georgia.

Now let’s shift to a ballot initiative that is noteworthy, though I confess I don’t have a very strong opinion about the ideal outcome.

Washington Revenue-Neutral Carbon Tax (Initiative #732) – The bad news is that a carbon tax would be imposed. This means, according to the Tax Foundation, that the “average household would pay $225 more per year for gasoline under the proposal, and $64 more for electricity.” The good news is that the sales tax would drop by one cent and the state’s gross receipts tax would almost disappear. So is this a good deal? Part of me says no because it’s never a good idea to give politicians a new source of tax revenue. But the fact that the measure is opposed by many hard-left green groups suggests that the idea probably has some merit.

For what it’s worth, I would vote against I-732 because of concerns that it eventually will lead to a net increase in the burden of government.

Last but not least, I’ll also be following the results on initiatives dealing with marijuana and tobacco.

States Voting for Marijuana Legalization (and Taxation) – Voters in Arizona, California, Maine, Massachusetts, and Nevada will have an opportunity to fully or partly legalize marijuana. These initiatives also include buzz-kill provisions to levy hefty taxes on producers and consumers.

States Voting for Tobacco Tax Increases – Politicians in California, Colorado, Missouri, and North Dakota all hope that voters will approve tax hikes that target smokers (and, in some cases, vapers). In every case, the tax hikes will fund bigger government.

P.S. I can’t resist adding that I’m also keeping my fingers crossed that other voters in Fairfax County will join me in rejecting a scheme to add a 4 percent tax on restaurant meals. Not just because it’s a tax hike to fund bigger government, but also because the hacks in the county government are using dishonest and reprehensible arguments to push the tax.

P.P.S. I will be updating my prediction for the presidential election, and also making predictions for the House and Senate, the morning of November 8.

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I’ve written before about Hillary Clinton’s unethical and (presumably) illegal actions, both in terms of her email server and the Clinton Foundation.

We’ve probably only seen the tip of the iceberg, but one thing that can be said with confidence is that there is strong scent of corruption, cronyism, and insider dealing that surrounds Mrs. Clinton.

Every day seems to bring new evidence. Writing for the Wall Street Journal, Kimberly Strassel puts it in blunt terms.

A Hillary Clinton presidency will be built, from the ground up, on self-dealing, crony favors, and an utter disregard for the law. This isn’t a guess. …It comes in the form of a memo written in 2011 by longtime Clinton errand boy Doug Band, who for years worked simultaneously at the Clinton Foundation and at the head of his lucrative consulting business, Teneo. It is astonishingly detailed proof that the Clintons do not draw any lines between their “charitable” work, their political activity, their government jobs or (and most important) their personal enrichment. Every other American is expected to keep these pursuits separate, as required by tax law, anticorruption law and campaign-finance law. For the Clintons, it is all one and the same—the rules be damned. …Any nonprofit lawyer in America knows the ironclad rule of keeping private enrichment away from tax-exempt activity, for the simple reason that mixing the two involves ripping off taxpayers. Every election lawyer in the country lives in fear of stepping over the lines governing fundraising and election vehicles. The Clintons recognize no lines. Here’s the lasting takeaway: The Clintons…know the risks. And yet they geared up the foundation and these seedy practices even as Mrs. Clinton was making her first bid for the presidency. They continued them as she sat as secretary of state. They continue them still, as she nears the White House. This is how the Clintons operate. They don’t change. Any one who pulls the lever for Mrs. Clinton takes responsibility for setting up the nation for all the blatant corruption that will follow.

Let’s look at some examples.

And we’ll start with the example of a Swiss bank that was being wrongfully persecuted by the American government for the supposed crime of protecting the privacy of clients (i.e., for following Swiss law inside Switzerland).

In other words, I’m very sympathetic to the bank. But I’m not a big fan of the Clintons using the bank’s legal woes as an opportunity to raise a bunch of money in exchange for a favorable disposition. Yet that’s exactly what happened, as reported by the U.K.-based Guardian.

In February 2009, the IRS sued UBS and demanded that it disclose the names of 52,000 possible American tax evaders with secret Swiss bank accounts. …On 19 August 2009, it was announced that UBS would pay no fine and would provide the IRS with information about 4,450 accounts within a year. Since the deal was struck, disclosures by the foundation and the bank show the donations by UBS to the Clinton Foundation growing “from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014”… The bank also teamed up with the foundation on the Clinton Economic Opportunity Initiative, creating a pilot entrepreneur program through which UBS offered $32m in loans to businesses, the newspaper reported. Other UBS donations to the Clinton Foundation include a $350,000 donation from June 2011 and a $100,000 donation for a charity golf tournament. Additionally, UBS paid more than $1.5m in speaking fees to Bill Clinton between 2001 and 2014, the newspaper reported.

James Freeman, in a column for the Wall Street Journal, cites two other examples of Clinton-style pay-to-play. The first example deals with Morocco.

We now know from emails published by WikiLeaks that before Mrs. Clinton formally launched her campaign, she arranged for the king of Morocco to donate $12 million to Clinton Foundation programs. What’s significant about the Morocco case is that for years the Clintons peddled the fiction that donors write checks simply to support wondrous acts of Clintonian charity. But that cover story isn’t available here. Mrs. Clinton’s trusted aide Huma Abedin put it in writing: The Moroccans agreed to the deal on the condition that Mrs. Clinton would participate at a conference in their country. Panicked Clinton-campaign aides persuaded Mrs. Clinton to avoid such a trip before launching her candidacy—and the foundation got the king to settle for Bill and Chelsea Clinton. But the record is clear. The king wanted the access, influence and prestige that all strongmen crave from legitimate democracies.

The second example comes from Kazakhstan.

This wasn’t the first time the Clintons satisfied such a desire while collecting megadonations. When it comes to human rights, Kazakhstan’s dictator, Nursultan Nazarbayev, makes Morocco’s king look enlightened. In power since 1991 and never freely elected, Mr. Nazarbayev must have enjoyed the sensation of Mr. Clinton endorsing him to lead an international election-monitoring group in 2005. The Kazakh strongman knows how to return a favor, and he granted valuable mining concessions to Clinton Foundation donors. The donors then built a global uranium powerhouse that was eventually sold to the Russians in a deal that required the 2010 approval of a U.S. government committee that included Mrs. Clinton’s State Department.

There’s a lot more material I could share, but the purpose of today’s column isn’t to demonstrate Hillary’s recent unethical behavior.

Instead, I want to show how she has a decades-long pattern of using government for self-advancement and self-enrichment. And I’ll follow by drawing (what should be) a very obvious lesson about public policy.

To keep today’s column manageable, let’s review just two examples.

First, let’s go back more than 20 years to the early days of Bill Clinton’s presidency. Peggy Noonan explains Hillary’s attempt to replace the career professionals at the White House travel with cronies from Arkansas.

Why don’t people like Hillary Clinton? …Why, when some supposed scandal breaks and someone says she’s hiding something, do people, including many of her supporters, assume it’s true? …the scandals stretch back…all the way to her beginnings as a national figure. …It was early 1993. …It was the first big case in which she showed poor judgment, a cool willingness to mislead, and a level of political aggression that gave even those around her pause. It was after this mess that her critics said she’d revealed the soul of an East German border guard.

Let’s look at what happened.

On May 19, 1993, less than four months into the administration, the seven men who had long worked in the White House travel office were suddenly and brutally fired. The seven nonpartisan government workers, who helped arrange presidential trips, served at the pleasure of the president. But each new president had kept them on because they were good at their jobs. A veteran civil servant named Billy Dale had worked in the office 30 years and headed it the last 10. He and his colleagues were ordered to clear out their desks and were escorted from the White House, which quickly announced they were the subject of a criminal investigation by the FBI. They were in shock. So were members of the press, who knew Mr. Dale and his colleagues as honest and professional. A firestorm ensued. Under criticism the White House changed its story. They said that they were just trying to cut unneeded staff and save money. Then they said they were trying to impose a competitive bidding process. They tried a new explanation—the travel office shake-up was connected to Vice President Al Gore’s National Performance Review. (Almost immediately Mr. Gore said that was not true.) The White House then said it was connected to a campaign pledge to cut the White House staff by 25%. Finally they claimed the workers hadn’t been fired at all but placed on indefinite “administrative leave.”

Noonan continues.

Why so many stories? Because the real one wasn’t pretty. It emerged in contemporaneous notes of a high White House staffer that the travel-office workers were removed because Mrs. Clinton wanted to give their jobs—their “slots,” as she put it, according to the notes of director of administration David Watkins—to political operatives who’d worked for Mr. Clinton’s campaign. And she wanted to give the travel office business itself to loyalists. There was a travel company based in Arkansas with long ties to the Clintons. There was a charter travel company founded by Harry Thomason, a longtime friend and fundraiser, which had provided services in the 1992 campaign.

Unsurprisingly, Mrs. Clinton lied about her efforts to turn the travel office into a goodie for a crony.

All along Mrs. Clinton publicly insisted she had no knowledge of the firings. Then it became barely any knowledge, then barely any involvement. When the story blew up she said under oath that she had “no role in the decision to terminate the employees.” She did not “direct that any action be taken by anyone.” In a deposition she denied having had a role in the firings, and said she was unable to remember conversations with various staffers with any specificity. A General Accounting Office report found she did play a role. But three years later a memo written by David Watkins to the White House chief of staff, recounting the history of the firings, suddenly surfaced. (“Suddenly surfaced” is a phrase one reads a lot in Clinton scandal stories.) It showed Mrs. Clinton herself directed them.

By the way, the most disgusting part of this scandal is the way Hillary sicced the government on Mr. Dale.

The White House pressed the FBI to investigate, FBI agents balked—on what evidence?—but ultimately there was an investigation, and an audit. …Billy Dale was indicted on charges including embezzlement. The trial lasted almost two weeks. …The jury acquitted him in less than two hours.

In other words, expect to see more Lois Lerner-type scandals if Hillary reaches the White House. There should be little doubt that she will use the power of government to attack her political opponents.

Now let’s go back even further in time, to the late 1970s when Hillary Clinton somehow managed to turn a $1,000 “investment” into $100,000 is less than one year. The New York Times reported on this rather implausible story back in 1994.

…in 1978 Hillary Rodham Clinton invested $1,000 in commodities futures and that the investment grew in 10 months of trading in the notoriously volatile market into a gain of nearly $100,000. Seeking to dispel suggestions that the trades were risk-free and improperly arranged by an Arkansas lawyer who represents one of the state’s most powerful companies, the White House issued a statement this afternoon that said the First Lady had put up her own money and that she bore all of the financial risks in a marketplace where three out of four investors lose money. The officials also released a year’s worth of brokerage statements from one of Mrs. Clinton’s two accounts. …Mrs. Clinton based her trades on information in The Wall Street Journal.

In other words, we’re supposed to believe that Mrs. Clinton, a complete novice, with no experience in the private sector or the investment business, suddenly decided to sink money into a very complex type of speculation.

And we’re supposed to believe that she made a series of very clever market-timing decisions and turned small amount of money into a big pile of money.

Needless to say, even the reporter for the New York Times couldn’t help but express skepticism and doubt. Particularly since nobody was willing to back up Mrs. Clinton’s story.

The White House insisted today that Mrs. Clinton received no improper financial assistance on the trades from the lawyer, James B. Blair, a close friend who at the time was the top lawyer for Tyson Foods of Springdale, Ark., the nation’s biggest poultry company. Mr. Blair has said that he had suggested that she get into the commodities market, and that he used his knowledge of trading to guide her along the way. During Mr. Clinton’s tenure as Governor, Tyson benefited from several state decisions, including favorable environmental rulings, $9 million in state loans, and the placement of company executives on important state boards. …brokers in the Springdale office of Refco where Mrs. Clinton executed the trades, including the one she describes as her personal broker, said in interviews in recent weeks that they have no recollection of ever talking with her about the trades. Mrs. Clinton and Mr. Blair have said that they used Robert L. (Red) Bone, the broker who founded the Springdale office of Refco, a Chicago commodities firm, to execute the trades. But Mr. Bone, who worked at Tyson for 13 years until 1973, insisted in several interviews this month that he has no recollection of ever trading for Mrs. Clinton or talking to her about commodities trades.

Here’s the bottom line. Back when this scandal surfaced in the 1990s, I talked to several people in the financial markets, every one of whom was 99.99 percent certain that Hillary was the beneficiary of a gift (if they were favorable to her) or a bribe (if they were unfavorable to her). And they all agreed that somebody on the inside arranged to give her, after the fact, the winning side of trades in order to make it look like she was simply a good investor.

Moreover, every single Democrat that I talked to admitted (but only off the record) that she was the recipient of a gift or a bribe.

And she hasn’t changed in the past 38 years. Government is a vehicle for personal advancement and personal enrichment.

Now let’s conclude by bring public policy into the discussion. Corrupt politicians are able to amass lots of power and money because government is big and powerful.

And I’m not making a partisan argument. Indeed, here are the same bullet points I used when pointing out the empty futility of Trump’s plan to “drain the swamp” and end DC corruption.

All I’m saying is that Hillary Clinton both supports big government and profits from big government. And as the public sector gets larger, don’t be surprised when you find out that Hillary and her cronies have figured out additional ways of feathering their own nests.

P.S. By the way, I do recognize that there’s an infinitesimally small possibility that Hillary’s story about cattle futures is accurate.

I also recognize, for what it’s worth, that there’s a greater-than-zero possibility that aliens will invade the earth tomorrow.

But neither of these hypotheses is remotely plausible (though if I had to pick, I’d go with the alien invasion for the simple reason that it would bring great joy to Paul Krugman).

P.P.S. Plenty of Republicans will get rich as well as Hillary expands government. If you don’t believe me, just consider how many of them collect campaign cash in exchange for votes in favor of ethanol and the Export-Import Bank.

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For data-loving policy wonks, the World Bank’s Doing Business report is a fascinating look at the degree to which nations have a policy and governance environment that is conducive to economic activity.

Unlike Economic Freedom of the World, it’s not designed to measure whether a jurisdiction has small government. Doing Business is probably best described as measuring quality of governance and whether a nation has sensible business policy.

That being said, there’s a lot of overlap between the rankings of the two publications. Indeed, you’ll notice many free-market countries in the top 20 of Doing Business, led by the “unsung success story” of New Zealand, followed by the capitalist haven of Singapore.

The United States is ranked #8, and you’ll notice most of the Nordic nations with very good scores, along with two of the Baltic nations.

Here’s some of the report’s analysis, including the unsurprising observation that countries with market-friendly policies tend to have high incomes (a lesson one wishes Hillary Clinton was capable of absorbing).

OECD high-income economies have on average the most business-friendly regulatory systems, followed by Europe and Central Asia. There is, however, a large variation within those two regions. New Zealand has a ranking of 1 while Greece has a ranking of 61; FYR Macedonia stands at 10 while Tajikistan is at 128. The Sub-Saharan Africa region continues to be home to the economies with the least business-friendly regulations on average.

If you’re wondering where the rest of world’s nations rank, click on the table in the excerpt. One thing that stands out is that Venezuela – finally! – isn’t in last place. Though being 187 out of 190 is not exactly something to brag about.

While it’s good to give favorable attention to the nations with the highest scores, it’s also worthwhile to see which countries are moving in the right direction at the fastest pace.

Ten economies are highlighted this year for making the biggest improvements in their business regulations—Brunei Darussalam, Kazakhstan, Kenya, Belarus, Indonesia, Serbia, Georgia, Pakistan, the United Arab Emirates and Bahrain.

Kudos to Georgia (the one wedged between Turkey and Russia on the Black Sea, not the one that is home to my beloved – but underperforming – Bulldogs). It’s the only country that is both in the overall top 20 and among the 10 nations that delivered the most positive reforms.

Here’s the table from the report showing why these 10 nations enjoyed a lot of improvement.

The report observes that a more sensible regulatory approach is associated with higher levels of prosperity.

A considerable body of evidence confirms that cross-country differences in the quality of business regulation are strongly correlated with differences in income per capita across economies.

But here’s the part that should open a few eyes among our leftist friends.

A more market-friendly regulatory environment also is linked to lower levels of inequality.

There is a negative association between the Gini index, which measures income inequality within an economy, and the distance to frontier score, which measures the quality and efficiency of business regulation when the data are compared over time (figure 1.8). Data across multiple years and economies show that as economies improve business regulation, income inequality tends to decrease in parallel.

As I’ve said many times tomorrow, I don’t care about differences in income. I simply want economic liberty so everybody has a chance to earn more income.

Nonetheless, it’s good have some evidence for statists who fixate on how the pie is sliced. Here’s the relevant chart from the report.

And here’s another chart showing that lots of regulation and red tape in labor markets (inevitably imposed for the ostensible goal of “protecting” workers) is correlated with a bigger underground economy.

Reminds me of the research showing how “labor protection” laws actually hurt workers.

Let’s now turn to the tax component, which predictably the part that grabbed my interest.

The score for this component is based on both the tax burden and the cost of tax compliance.

While the size of the tax cost imposed on businesses has implications for their ability to invest and grow, the efficiency of the tax administration system is also critical for businesses. A low cost of tax compliance and efficient tax-related procedures are advantageous for firms. Overly complicated tax systems are associated with high levels of tax evasion, large informal sectors, more corruption and less investment.

Here’s a table from the report showing some of the good reforms that have happened in various nations.

Sadly, America did not make any improvements in tax policy, so we don’t show up on any of the lists.

But since we’re on that topic, let’s now take a closer look at the United States. As already noted, America is ranked #8, which obviously is a reasonably good score.

But if you look at the various components, you sort of get the same story that we saw with the World Economic Forum’s Global Competitiveness Report, namely that there are some sub-par government policies that are hampering an otherwise very efficient private economy.

I’m particularly displeased that the U.S. scores so poorly (#51) in “starting a business.” And just imagine how much the score will drop if statists succeed in forcing states like Delaware, Wyoming, and Nevada to alter their business-friendly incorporation laws.

And I’m also unhappy that we rank #8 when the United States started at #3 in the World Bank’s inaugural 2006 edition of Doing Business. Thanks Bush! Thanks Obama!

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Last year, I explained the theoretical argument against antitrust laws, pointing out that monopoly power generally exists only when government intervenes.

Now it’s time to consider a real-world example from the private sector and ask whether we should be concerned about monopoly power. ATT and Time Warner have announced a merger, a step that has triggered lots of hand-wringing by politicians.

But as I explain in this interview for a British news outlet, the expanded company won’t have any power or ability to coerce me, particularly so long as politicians don’t create any “barriers to entry” to hinder the entry of new competitors to the market.

The Skype connection became garbled for a few seconds at the end of the interview, but I think my point about the misuse of antitrust laws was reasonably clear.

Suffice to say that allowing politicians and bureaucrats to have any authority over mergers is a recipe for abuse and corruption as companies try to use antitrust laws to sabotage their competitors.

Let’s see what some experts have written on this topic. And we’ll start by looking at the big picture. Writing for Bloomberg, Professor Tyler Cowen points out that antitrust laws often don’t make sense.

Reading through old cases does not induce great faith in the contemporary usefulness of 19th- and 20th-century antitrust laws. …For instance, the famous suits against Standard Oil, Kodak and Alcoa wouldn’t make sense in today’s globalized economy. …In 1998, the U.S. Justice Department initiated an antitrust suit against Microsoft, partly on the grounds that the company sought to extend its market power to browsers. Few people today think the company’s Internet Explorer browser failed because the government restored competitiveness; Firefox and Google built better software. Yet prosecutors spent years distracting the talent of one of America’s most successful companies, as they had with IBM earlier in a 13-year case dropped in 1982.

And he points out how monopoly power often is created by government intervention and regulation.

…there is a strong case that growing concentration in the hospital market has raised health-care costs. Some major metropolitan areas have only a small number of hospital chains. Part of the problem is that highly regulated environments encourage consolidation and larger firms to deal with compliance costs… Cable television is another area where anti-monopoly remedies might be appropriate, but keep in mind that cable is typically a government-created local monopoly.

Now let’s look at he specific case of the ATT/Time Warner merger.

Holman Jenkins of the Wall Street Journal is not impressed by those who want government interference. And he shares my disdain for the way influence peddlers in Washington are the big beneficiaries of antitrust laws.

…this week’s proposed merger of AT&T and Time Warner is eliciting opposition that is ferocious, idiotic and almost contentless. …tens of thousands of people in Washington make their living by extracting rents from companies going about their business and trying to adapt to besetting waves of technological and market change. …Unwisely, Silicon Valley mostly sat out 2014’s epic battle over the Obama administration’s desire to impose antique utility regulation on broadband. Its argument: Who cares? Technology will swamp the regulators with broadband ubiquity anyway, so why pick a fight…the Valley’s naïfs may discover they have underestimated the power of bureaucratic perversity and political indifference to things that would actually serve the public good. One way to look at the inevitable torture AT&T is about to undergo at the hands of Washington’s regulators: It will be the first test of the libertarian-optimist theory that technology is more powerful than a bloody-minded bureaucrat.

Last but not least, Paula Dwyer’s Bloomberg column takes a dim view of those who want the heavy foot of government to second guess the invisible hand of the market.

Donald Trump and Bernie Sanders, wearing their populist stripes, want regulators to block it outright. …the politicians’ concerns are overblown. …Antitrust, of course, is meant to protect consumers from the higher prices and reduced choices that result when a company has market power. But a merged AT&T and Time Warner are in different industries, and their merger wouldn’t affect ownership concentration. Nor would it result in the loss of a competitor from the market.

And she points out the dismal history of antitrust enforcement.

…think back to 1974 to the original AT&T antitrust case, which also began from a fear of vertical integration. …For sure, AT&T had a monopoly, but it was created and sanctioned by the federal government. All that was needed was a government deregulation order and a green light that it wouldn’t block competitors. Instead, the U.S. sued to break up Ma Bell. …If the U.S. had simply deregulated plain old telephone service, any one of these technologies could have forced AT&T to adjust or disappear. The U.S.’s 1998 antitrust case against Microsoft had much the same fighting-the-last-war problem. …while the Justice Department was fixating on browsers and operating systems, the personal computer was losing market share to laptops, which lost out to tablets and which are now being overtaken by smartphones. While Microsoft was bogged down with the Windows case, which it eventually settled in 2001 on favorable terms to the company, a new generation of tech giants — Google, Facebook, Amazon — took flight. The lesson is that a technology or media conglomerate’s dominance these days is almost certainly transitory.

In other words, let the merger proceed. It may be a wise business decision. Or it may be a foolish business decision.

But that outcome should be determined by the preferences of consumers in a competitive marketplace.

The heavy foot of government shouldn’t play a role. Especially since, as noted by this cartoon, antitrust laws are so broad and vague that companies can get in legal trouble for charging more than their competitors, less than their competitors, and the same as their competitors.

P.S. If this information hasn’t been sufficient to make you skeptical about antitrust laws, then also keep in mind that the European Commission’s tax shakedown of Apple is based on antitrust policy rather than tax policy.

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Based on what she’s been saying during the campaign, Hillary Clinton is a big fan of class warfare. She has put forth a series of “soak-the-rich” tax hikes designed to finance bigger government.

Her official plan includes provisions such as an increase (“surcharge”) in the top tax rate, the imposition of the so-called Buffett Rule, an increase in the tax burden on capital gains (including carried interest), and a more onerous death tax.

The Tax Foundation explains that this plan won’t be good for the economy or the budget.

Hillary Clinton’s tax plan would reduce the economy’s size by 1 percent in the long run. The plan would lead to 0.8 percent lower wages, a 2.8 percent smaller capital stock, and 311,000 fewer full-time equivalent jobs. …If we account for the economic impact of the plan, it would end up raising $191 billion over the next decade.

Here’s a table showing the static revenue impact for the various provisions, followed by the estimated economic impact, which then allows the Tax Foundation to calculate the real-world, dynamic revenue impact.

So what does all this mean?

Well, the Congressional Budget Office estimates that tax revenue over the next 10 years will be $41,658 billion based on current law. Hillary’s plan will add $191 billion to that total, an increase of 0.46 percent.

Which means that she’s willing to lower our incomes by 0.80 percent to increase the government’s take by 0.46 percent. A good deal for her and her cronies, but bad for America.

But it gets worse. Hillary’s official tax plan doesn’t include her biggest proposed tax hike. As I’ve warned before, and as Andrew Biggs of the American Enterprise explains in a new article, she has explicitly stated her support for huge tax hikes to bail out Social Security.

…she has endorsed both of the main tax increases included in Sanders’ Social Security plan: imposing the Social Security tax on earnings above the current $118,500 cap and applying Social Security taxes to investment income in addition to wages.

Andrew warns that busting the wage-base cap may boost payroll tax receipts, but such a policy will lead to lower revenues from other sources.

Eliminating the payroll tax ceiling would require workers and employers to each pay an additional 6.2% tax on all earnings above the ceiling, currently $118,500. Both the SSA actuaries and the Congressional Budget Office assume that when employers are hit with an additional payroll tax they will over time reduce employees’ wages to cover the increased cost, consistent with economists’ view that employees ultimately “pay” for employer-provided benefits through lower wages. Those lost wages would then no longer be subject to federal income taxes, Medicare payroll taxes or state government income taxes. If the average marginal tax rate on earnings above the current payroll tax ceiling is 48% – say, the top earned income tax rate of 39.6%, plus the 3.8% top Medicare payroll tax rate, plus a roughly 5% state income tax – then federal and state tax revenues would fall by 26 cents for each additional dollar of Social Security taxes collected.

And this estimate is based solely on the reduction in taxable income that occurs as businesses give their employees less take-home buy because of the higher payroll tax.

To be accurate, you also have to consider how workers will react (and rest assured that upper-income taxpayers have plenty of ability to alter the timing, level, and composition of their income). Andrew looks at the potential impact.

…revenue losses occur even if individual earners themselves make no adjustments to their earnings in response to higher tax rates. They’re purely a function of employers adjusting wages to compensate for their payroll tax bills. But if affected earners react to higher tax rates by reducing their earnings, either though less work or by tax avoidance strategies, then net revenue losses would be even higher. A 2010 literature survey by economists Emmanuel Saez, Joel Slemrod, and Seth Giertz found that high earners reduce their earnings by between 0.12% and 0.40% for each 1% increase in their taxes. These estimates imply that total revenues gained by eliminating the Social Security tax max would fall one-third to one-half below the static assumptions that Social Security reforms rely upon. Other credible academic studies find even higher sensitivities of taxable income to tax rates.

For more information, here’s a video I narrated on the issue for the Center for Freedom and Prosperity.

Let’s close on a grim note. If Hillary Clinton goes forward with her plan to bust the wage base cap and change Social Security from an actuarially bankrupt social insurance program into a conventional tax-and-spend redistribution program, she won’t collect very much tax revenue because of the way workers and employers will react.

But from Hillary’s perspective, she won’t care. Under the budget rules governing Washington, she’ll still be able to increase spending (i.e., buy votes) based on how much revenue the Joint Committee on Taxation inaccurately predicts will materialize based on primitive “static scoring” estimates.

In other words, the Laffer Curve will prevail, but – other than the ability to say “I told you so” – proponents of good policy won’t have any reason to be happy.

And when, in the real world, the long-run fiscal and economic outlook weakens because of her misguided policies, Mrs. Clinton will just propose additional tax hikes to deal with the “unexpected” shortfalls. Lather, rinse, repeat, until we become Greece.

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