Posted on 01/04/2018 9:23:08 PM PST by Oshkalaboomboom
"A wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation -- and may finally raise wages significantly," opens a recent New York Times article surveying the state of the American economy.
One imagines that readers of the esteemed paper were surprised to run across such a rosy assessment after having been bombarded with news of a homicidal Republican tax plan for so many weeks. But not to worry! Over the next few thousand words, the authors do their best to assure readers that neither deregulation nor tax cuts are really behind this new economic activity -- even if business leaders keep telling them otherwise.
For example, they claim that "There is little historical evidence tying regulation levels to growth." A few paragraphs later, we again learn that "The evidence is weak that regulation actually reduces economic activity or that deregulation stimulates it."
A reporter without an agenda might have written that evidence was "arguable," because I bet I could corral a bunch of economists to tell you that lowering the cost of doing business spurs economic activity quite often. And though the Trump administration somewhat overstates its regulatory cutbacks, it has stopped hundreds of Obama-era regulations from being enacted. Even better, it has stopped thousands of yet-to-be-invented regulations from ever being considered. There's plenty of evidence, in the article and elsewhere, that this kind of deregulation has plenty to do with investment and job growth.
There is also plenty of evidence that econ reporters at major publications have spent the past decade propping up economists who tell them what they want to hear. That is to say, they prop up economists who obsess over "inequality" rather than economic growth, who worry about the future of labor unions or climate change or whatever policy liberals happen to be plying at the moment. There are plenty of economists out there making good arguments for the free market who will never be member of the "economists say" clique.
For eight years, we consistently heard about how "economists say" everything Democrats were doing was great (even when hundreds disagreed). Unsurprisingly, "economists" were wrong about a lot. The rosy predictions set by President Obama's Council of Economic Advisers regarding the "stimulus," the administration's prediction of 4.6 percent growth by 2012 and the Congressional Budget Office predictions about Obamacare were all way off base.
There are thousands of unknowns that can't be quantified or computed, including human nature. But after decades of using data to help us think about goods, services, jobs, consumption and our choices, "economists say" is now used to coat liberal policy positions with a veneer of scientific certitude. And since Democrats began successfully aligning economics with social engineering, we've stopped seriously talking about the tradeoffs of regulations.
A good example of this trend is the push for a $15 minimum wage -- an emotionally satisfying, popular and destructive policy idea. Most cities that have passed the hike have experienced job losses. When researchers at the University of Washington studied Seattle's $15 minimum-wage hike, one of the largest in the nation, they found that thousands of fewer jobs were created and thousands of people lost hours of work, making them poorer.
No doubt a lot of people were surprised. Vox, a leading light in the liberalism-masquerading-as-science genre, ran an article headlined "The Controversial Study Showing High Minimum Wages Kill Jobs, Explained." You might wonder why incessantly quoted studies from liberal "nonpartisan" groups that falsely predicted minimum wages wouldn't hurt cities aren't "controversial." Because if you want to raise the minimum wage, you will raise the price of labor and often reduce the amount of labor that's going to be hired. That's the trade-off. For decades, most economists agreed.
While most economists I've known are relatively humble about forecasting, the ones who aren't get most of the press. "Out of 42 Top Economists, Only 1 Believes the GOP Tax Bills Would Help the Economy," a November Vox headline read. (Indeed, 36 percent of those polled gave the wholly rational answer of "uncertain.") "We'll be lucky to have 2 percent" growth, "economists say" regular Mark Zandi told CNN in May.
Certainly, the economy doesn't have the room to grow that it had in 2007 or 2012, but so far, Zandi is wrong. Neither deregulation nor tax cuts are a panacea. But businesses have already acted on deregulation and corporate tax cuts. Dozens of companies announced they would hand out bonus checks to hundreds of thousands of workers before the corporate tax cut was even signed into law. Perhaps these corporations only did it all to gain favor with the administration. Hey, some people suck up to government by cutting bonus checks for their workers, and some people make electric cars no one wants. The fact is that deregulation and tax cuts matter. We already have evidence. We just don't give voice to the economists who would tell us so.
That’s the best description I’ve seen.
Economics is one of those “sciences” that the results of their theories are not in any way testable till long after the Economist has puttered off.
It is also a pursuit that I often think folks forget is ultimately about people, flesh and blood people, and not jet the movement of little scraps of paper.
In particular I see the ultimate failing of Keynesian economics as his abject failure to anticipate human mendacity, what real politicians and bureaucrats (not to mention ordinary people) would do with his ideas.
Keynes wrote that spending should be countercyclic to the economy: that government should spend more in bad times and less in good times. When he opined this he missed the inevitable transition where people would see that while bad times demanded more spending they would only see good times as an opportunity for more spending. This transition was, I would argue, already going on when Nixon was in office and he said we’re all Keynesians now.
But they aren’t, certainly not now. They’re Keystone Keynesians (think Keystone Cops).
Adam Smith was right because he was interested in how people and nations might act to benefit themselves. Keynes was wrong because he was interested in how government might behave to make the economy rational.
To fail in the human domain, the philosophical realm, as he did should invalidate all his theory no matter how elegant and rational it might seem to be.
Economists don’t run companies. Economists never stand in line at the unemployment office. Economists don’t design or engineer anything that sells. Economists don’t get elected to anything. Economists write things that seventy-five percent of the public will never read. Economists spend their lives trying to explain why a guy will buy a 5-cent pencil over a 8-dollar Japanese pen.
This is one of those arguments that goes round and round. I would ask about regulation and the economy, “Would you please tell me the regulation you are referring to?”
Without specifics the argument is baseless and yet we use the term so generally.
Capitalism should be unfettered by regulations, but the law about taxes needs regulation or nobody would follow it. Companies cannot be trusted to not pour their waste in rivers without regulation, so we allow those kinds of regulation. We know that businesses have learned to prosper in the presence of regulations that are fairly enforced on a level playing field.
Leave the oil companies the freedom to use technology and explore the land and coastal areas far and wide and the oil business will flourish.
Economics is not difficult when you are willing to discuss what you actually intend to regulate.
The other extreme— regulation of what farmers can plant and what jobs people can take is nuts. That kind of society will not succeed and regulation is at the heart of the failure.
Academic economists know nothing of the world, know nothing about people and how and why they act. Any businessman knows infinitely more.
That's why 75% of what economists say is nonsense. If it can't be quantified and measured, it doesn't exist. (so they believe)
Our economy is booming. The tax cuts are not even in effect yet but business is factoring this in and wages are going up. Employment is going up. Unemployment is going down. Poverty is going down. Food stamps are going down. When the trillions of dollars parked overseas by companies come home it will become even better. This is only the beginning. MAGA! When you take off the burdens of government regulation and taxation, our great nation can economically kick ass.
When you take the yoke of government off business and the peoples back, prosperity happens.
ps
Companies do not pay one damn cent for taxes. When you buy a car, a bottle of beer or the food you eat the taxes are part of the price. Consumers pay all taxes be it purchases or their wages. That is why we need the fair tax! Eliminate the IRS and make all federal revenue a function of a national sales tax. Do not do what most of Europe has done. They have a national sales tax called the VAT. They also have income taxes. They reach into your pocket twice. They thus control you totally. That is “The Road to Serfdom.”
the council of economic advisors have holdovers from the clinton era. if they predicted growth after 2010 (obamacare passage), then that was imho an arguable call. by 2015 imho the writing was on the wall, obama was the regulations president and the economy was the victim.
If you line up all of the economists end to end they will not reach a conclusion. Journalists are unsuccessful fiction novelists.
It’s a dismal “Science”, like CAGW.
I believe that elites are willing to kill jobs in exchange for $15/hour minimum wage, because the alternative is reducing freebies for the idle - and that’s how kings and tsars get killed. We currently have a system where someone working a full-time low-wage job is worse off than someone who does nothing, and they seek to rectify that even if it moves people from the former to the latter group. Too many imported drones have learned they are better off not working at $8/hour; many Americans (at least here in NJ) realized that a long time ago - it would barely pay their property taxes alone for a year.
Harry Truman said that if you lined up all the economists from end to end they would all point in different directions.
Economists tell us that free trade i.e. low import tariffs are good. But the result is production has moved offshore. But somehow the opposite is not true. High tariffs just mean everything stays the same and production will not be on shored. How is that possible? Low tariffs production gets off shored but high tariffs product is not repatriated? MAKES NO SENSE.... Free Traitors™ are duplicitous liars.
Adam Smith never envisioned an income tax and one sided free trade.
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