A More Inconvenient Truth

Archive for January 2008

Free trade is economics, fair trade is marketing

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Via Greg Mankiw, Steven Landsburg in the NY Times talks about the myth of protectionism. Interesting look at the moral side of the debate. Friedman often cited free trade as one concept that almost all economists–from Adam Smith on up–agree on. “Fair trade” makes for good marketing but doesn’t help those it intends to. It’s important to judge based on outcomes, not intentions.

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Written by WithConfidence

January 28, 2008 at 9:42 pm

Cash out of Social Security

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Came across an article from 2003 (by Arnold Kling at EconoLog) about the logic behind Friedman’s proposal to transition out of Social Security. Friedman himself sums it up:

What you should do, in my opinion, is to give every person who now has a claim on Social Security bonds equal to the value of his claim, and set him free. Let him save. Let him do what he wants with it. That would not add a dollar to the debt we now have; it would just convert an unfunded debt into a funded debt.

Currently, government liabilities are hidden. We don’t let private companies account this way, why then the federal government? It isn’t privatization, it is transparency that would force debate on the issue. Unfortunately, Social Security lingers in the dark–to the tune of over $50 trillion–without resolve in Washington.

Written by WithConfidence

January 28, 2008 at 7:07 pm

Greed is good (for progress)

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Via Carpe Diem, “What a Difference a Century Makes.” It is amazing to see the progress that has been built on capitalism’s back. The negative connotation of “greed” doesn’t change the fact that progress is a by-product of self-interest. Reminds me of Rand in Atlas Shrugged:

So you think that money is the root of all evil? Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

Written by WithConfidence

January 28, 2008 at 5:38 pm

Posted in Ayn Rand, Globalism

Corporate tax competition to improve global competitiveness

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Informative video on tax competition from the Center for Freedom and Prosperity. The US is at the center of global markets–just look at the international reaction to the market’s current correction. But how can US leaders secure this position against long-term threats from China, India, and other developing (and developed) economies?

With the R-word being brandied everywhere you turn, the best that our government can come up with is a fairy tale fiscal stimulus. Instead of reiterating the thrashing this “feel good economics” has received, I’ll point you to Mankiw’s Coalition against Fiscal Stimulus.

Where is the corporate tax rate in this debate? Paulson called for this back in July 2007 but I haven’t recently heard anyone propose to slash corporate tax rates–a move which would do more than anything else to anchor the US at the center of the global economy. The “flight to quality” would surely be accelerated by this type of pro-growth tax reform. Once again, politicians push intentions over outcomes. I shouldn’t be surprised…

Written by WithConfidence

January 28, 2008 at 4:29 pm