Wednesday, September 17, 2014

A Debate on Income Inequality

The following is the Youtube video of the debate I participated in concerning the topic of income inequality.  As always, your thoughts are welcome.

Tuesday, September 16, 2014

Thank you, President Obama for helping us come in 32nd.

 

What follows is from the September 15, 2014 Wall Street Journal
Any day now the White House and Sen. Charles Schumer (D., N.Y.) will attempt to raise taxes on business, while making the U.S. tax code even more complex. The Obama and Schumer plans to punish businesses for moving their legal domicile overseas will arrive even as a new international ranking shows that the U.S. tax burden on business is close to the worst in the industrialized world. Way to go, Washington.

On Monday the Tax Foundation, which manages the widely followed State Business Tax Climate Index, will launch a new global benchmark, the International Tax Competitiveness Index. According to the foundation, the new index measures "the extent to which a country's tax system adheres to two important principles of tax policy: competitiveness and neutrality."

 
A competitive tax code is one that limits the taxation of businesses and investment. Since capital is mobile and businesses can choose where to invest, tax rates that are too high "drive investment elsewhere, leading to slower economic growth," as the Tax Foundation puts it.
 
By neutrality the foundation means "a tax code that seeks to raise the most revenue with the fewest economic distortions. This means that it doesn't favor consumption over saving, as happens with capital gains and dividends taxes, estate taxes, and high progressive income taxes. This also means no targeted tax breaks for businesses for specific business activities." Crony capitalism that rewards the likes of green energy with lower tax bills while imposing higher bills on other firms is political arbitrage that misallocates capital and reduces economic growth.
 
The index takes into account more than 40 tax policy variables. And the inaugural ranking puts the U.S. at 32nd out of 34 industrialized countries in the Organization for Economic Co-operation and Development (OECD).
 
With the developed world's highest corporate tax rate at over 39% including state levies, plus a rare demand that money earned overseas should be taxed as if it were earned domestically, the U.S. is almost in a class by itself. It ranks just behind Spain and Italy, of all economic humiliations. America did beat Portugal and France, which is currently run by an avowed socialist.
 
The Tax Foundation benchmark compares developed economies with large and expensive governments, but the U.S. would do even worse if it were measured against the world's roughly 190 countries. The accounting firm KPMG maintains a corporate tax table that includes more than 130 countries and only one has a higher overall corporate tax rate than the U.S. The United Arab Emirates' 55% rate is an exception, however, because it usually applies only to foreign oil companies.
 
The new ranking is especially timely coming amid the campaign led by Messrs. Obama and Schumer to punish companies that move their legal domicile overseas to be able to reinvest future profits in the U.S. without paying the punitive American tax rate. If they succeed, the U.S. could fall to dead last on next year's ranking. Now there's a second-term legacy project for the President.
 
The new index also suggests taxation is a greater burden on business in the U.S. than in countries that American liberals have long praised as models of enlightened big government. Finland, Germany, Norway and Sweden, with their large social safety nets, all finish in the top 20 on the new ranking. The United Kingdom manages to fund socialized medicine while finishing 11 spots ahead of the U.S.
The new champion of tax competitiveness is Estonia, where—liberals may be astonished to learn—people enjoy the rule of law and even paved roads, despite reasonable tax rates. (See the list nearby.)
 
Liberals argue that U.S. tax rates don't need to come down because they are already well below the level when Ronald Reagan came into office. But unlike the U.S., the world hasn't stood still. Reagan's tax-cutting example ignited a worldwide revolution that has seen waves of corporate tax-rate reductions. The U.S. last reduced the top marginal corporate income tax rate in 1986. But the Tax Foundation reports that other countries have reduced "the OECD average corporate tax rate from 47.5 percent in the early 1980s to around 25 percent today."
 
This is also a message to self-styled conservative "reformers" who lecture that today's economic challenges aren't the same as they were under Reagan but propose to do nothing about the destructive U.S. corporate tax code. They're missing what could be the single biggest tax boost to economic growth and worker incomes. Abundant economic research, by Kevin Hassett and Aparna Mathur among others, has shown that higher corporate taxes lead to lower wages.
 
Rather than erecting an iron tax curtain that keeps U.S. companies from escaping, the White House and Congress should enact reform that invites more businesses to stay or move to the U.S.

Thursday, September 11, 2014

Ray Rice, my Son - and the rest of us

A few years ago my youngest son - less than 10 at the time - wrote a letter to one of his favorite football players in the National Football League. 
 
His letter to Ray Rice included a very nice drawing, complete with various crayon work, that depicted Mr. Rice running away from a defender during an NFL game.
 
A few weeks later, to his complete shock, he received an envelope from Baltimore, Maryland.  In it was an autograph -  that he had not asked for - of Ray Rice.
 
A couple of years ago my son asked for a Ray Rice jersey for Christmas and has worn it until it does not fit real well anymore.
 
The autographed picture was framed and put up on his wall - and proudly displayed and talked about to anyone who would listen.  The jersey is still in his closet.
 
My thirteen-year old son still has not been told, or heard about, or read about what Ray Rice did on the elevator months ago.

I have grappled with what to do about all of this.

I have not - and will not - watch the TMZ video of his violent behavior.  Why should I? 

I will not show him the video either.  Why would I?

My son has been raised in a home where domestic violence does not exist.  He has also been raised in a home where sin does exist. 

No one has ever filmed his father using bad language while he is angry.  No one has filmed his mother and father being selfish or rude or prideful or angry.  No one has ever filmed the sinful thoughts of his father or mother.  Nor has anyone ever filmed the sins of my children.

To the outside world the Chambless family appears to be relatively nice, polite and generally giving.

The outside world has no video of my 48 years of bad decisions.  If the outside world had the same film of me that God has, the outside world would not think much of me.  Or you.

I feel terrible for Ray Rice and his wife.  I feel terrible about what she went through and what they are both going through now.    He has been tried, judged and convicted by the self-righteous among us.    I have heard people judge him as if he is a _______________________________!!!!(FILL IN THE BLANK).

People all over the world - many of whom have done horrible, unrecorded things, have sentenced him, in their hearts, to a life of unemployment, misery and mockery.

The Bible is pretty clear about the standard by which we judge people.  The same standard we use will be used on us.

Ray Rice committed a terrible sin, but not an unforgiveable one.  His wife has forgiven him.  God can forgive him.

As I leave my son's autograph on the wall and his jersey in his closet I wonder,

"Why can't the rest of us sinners forgive him?"

Tuesday, September 2, 2014

Closing the Income Gap - an Invitation to a debate

What follows is from the Orlando Sentinel.  I hope some of you can make it to this debate.
_______
 
 
Economists say the gap between rich and poor has been growing in America for years. What has been causing this trend, and what might it mean for the future of the U.S. economy and the American dream?
 
Does the solution lie in government action, such as increasing the minimum wage and raising taxes on the wealthy? Or would a free-market approach — reducing taxes and regulations to encourage employers to invest and hire — be more effective? And what impact might result from policy changes in areas such as education, trade, job training and worker benefits?
We’ll discuss and debate these and other ideas with a panel that spans the political spectrum at our next “Florida Forward” series of forums on critical issues. We’re calling this one, “Closing the income gap.”
 
Our informed and outspoken lineup will include University of Central Florida economist Sean Snaith, Valencia College economist Jack Chambless, Organize Now Executive Director Stephanie Porta, lawyer and political commentator Tico Perez, and former Orlando Police Chief Val Demings.
The panelists will take questions from us, and from the audience.
 
The lunchtime forum is Tuesday, Sept. 16 at the Alfond Inn in Winter Park. For tickets and other details, click on the link below or call 407-420-5599.

FLORIDA FORWARD/CLOSING THE INCOME GAP
eventbrite.com

Sunday, August 10, 2014

The American Dream is Alive and Well in Williston, North Dakota

What follows is my Op-Ed in today's Orlando Sentinel.  If you are a rapid environmentalist your comments are not welcome...

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This summer marks five years since the "Great Recession" officially ended.
 
For millions of Americans, it probably does not seem possible that our economy has grown for that long. After all, by historical standards, the current recovery is anemic, if not borderline invisible.
Sixty months after the last recession ended, the unemployment rate is still well above the 4 percent to 5 percent range we would see in past recoveries. The gross domestic product continues to slog along at a 1 percent to 2 percent growth clip. Nearly half of all Americans are receiving some form of social-welfare income from taxpayers, and the labor-force participation rate — the percentage of Americans working or seeking work — is at a three-decade low.
 
For young people, the news is even worse, with far greater rates of unemployment or total disconnection to the labor force or to a job that matches their education.
 
This latter reality is why this fall I am going to show my students where Williston, N.D., is located; 2,188 miles from Orlando, Williston is a modern-day boomtown that is providing jobs, high incomes and hope to people all over the world.
 
While driving through North Dakota this summer with my family I decided we would spend a few hours looking around and talking to people who have poured into this remote locale.
 
What I found was Saudi Arabia of the North American plains. Stunning to behold, I looked out upon hundreds of oil wells as far as the eye could see. My family and I saw billboards advertising new-home subdivisions and ads on newly constructed buildings that offered employment to truck drivers, carpenters, electricians and more. Everywhere we looked were new businesses ranging from hotels to restaurants, heavy-equipment dealers, car dealerships and everything else a booming town would need.
 
At the local Wal-Mart, we saw and heard workers of all races and ethnicities. The young man who bagged our items was a young immigrant from Africa. His starting pay? $17.10 per hour. If he offered to work the night shift, he would make $19 per hour.
 
The girl at the window of a fast-food restaurant was from Russia. Starting pay for her? $15 per hour.
What, in the name of supply and demand, can possibly lead to two teenagers earning several dollars more than the $10.10 minimum wage that Barack Obama and Charlie Crist desire?
It is simple.
 
North Dakota decided years ago that the vast oil reserves under the ground and accessible only by technology called fracking would be fair game to the oil companies willing to come in and get it.
Not only did North Dakota decide to allow massive drilling and extraction to take place, but it did so without adding thousands of pages of burdensome, incentive-killing regulations and without hammering property owners and oil companies with Jimmy Carter-era "windfall-profits taxes."
Instead, North Dakota adopted a free-market, private-property-respecting mentality that told the world it was open for business.
 
Today, North Dakota has the lowest unemployment rate in the U.S. at only 2.6 percent. With chronic shortages of skilled — and unskilled — labor, the supply-demand equation is greatly in favor of those willing to supply their labor services to the oil fields, Wal-Mart and the other businesses in this town.
 
Even without a minimum wage of $10.10 per hour, businesses have to pay the going rate or face labor shortages. Without any law, regulation or mandate, the natural forces of supply and demand have led to compensation levels far beyond what many college graduates are pulling down in other places around America.
 
Without any central planning from Washington, D.C., the natural allure of profit has led to all of these entrepreneurs entering a region that has brutally cold winters and few entertainment options.
Friedrich Hayek taught the world decades ago that all that is needed for a nation to prosper is for government to allow people to pursue their self-interest, so long as that pursuit does not violate the life, liberty or property of another person.
 
This system is based on the concept of spontaneous order, which means it does not require intelligent busybodies in far-away political capitals to plan and organize and coordinate economic activities. All that is needed is for those we elect to get out of the way by regulating and taxing human beings less, and we will see more Willistons emerge.
 
I hope I can convince some of my students to rent a moving van and chase a realistic American dream.

Friday, August 8, 2014

An Immigration Policy for 'Real Americans'

I read in the Orlando Sentinel this morning that 70 percent of Americans and 86 percent of Republicans feel that immigrants threaten America.  What follows is an Op-Ed I wrote for the Sentinel in 2006.  Your comments are welcome.

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Here we go again. It seems that every few years someone looks around and starts shouting that too many people are showing up on our shores, in our airports and in our labor markets.

Round 132 in the "Are Immigrants Destroying America?" debate is upon us, and politicians from both sides of the aisle are frantically sticking their wet fingers in the political winds to see what Americans want this time.

What is unfortunate in this debate is that we keep ignoring all of the historical and contemporary analysis that has been applied to this question, and we keep finding the same facts. We may not like the facts we are finding, but as Aldous Huxley once said, "Facts do not cease to exist because they are ignored."

So, what are the immutable truths about the folks who walk, fly and swim to get here?

First, they create jobs, not destroy them. Immigrants from up and down the wealth scale have proved to be incredibly entrepreneurial. Many technologically savvy immigrants from Western Europe and India helped create thousands of jobs in Silicon Valley. One in six of these companies was started by immigrants.

Many of America's best scientists, economists and engineers are not originally from Kentucky or Florida or Maine. They are from Beijing, Moscow and Bangalore. This reality is because American kids can't do math and science, so Microsoft and Google have had to find these geniuses somewhere else.

Poorer immigrants have created thousands of restaurants, retail shops and other service-based companies. One visit to San Francisco, New York or Chicago will show you how many native-born Americans are earning a paycheck because of the incredible efforts immigrants have put into our quasi-capitalistic market.

Immigrants without money and business plans have filled jobs in meat packing, textiles, lawn care and restaurants that Americans simply won't take. Sadly, it is beneath the dignity of the average American to pick onions or cut fat off a pig 10 hours per day. Who is supposed to fill this gap?

Immigrants have also helped keep our rate of inflation down by supplying valuable labor in areas where shortages would otherwise exist. Imagine what the price of housing or restaurant meals would be if not for immigrant roofers and dishwashers with tremendous work ethics.

We can also thank immigrants for having lower crime rates, higher graduation rates and lower participation in the welfare state than native-born Americans. Routinely, immigrants from the Caribbean show up, look around and find opportunity where many native-born Americans look around and give up on the chance to advance over time.

If I were president of the United States, I would fly to New York and read the plaque on the Statue of Liberty. Then, I would go on television and announce to my fellow Americans that every one of us is a descendant of someone who originally was not from here. I might also mention that if we want to help India and China pass us up in the economic superpower game, the surest way of achieving that is to keep immigrants from those nations out.

I would also suggest that we are never going to win the war on terror if we do not let liberty-loving people from the Middle East come over here to find out why America is a nice place to live.

Finally, I would suggest that if we want to kick out the immigrants, we might want to look at our own history with respect to the first Americans, "real Americans." I seem to recall that when we showed up from Europe -- as immigrants -- we took away their property, forced them to move to less desirable places and killed many of those who resisted.

Perhaps then the best immigration policy of all would be for everyone who is not an American Indian -- also known in politically correct terms as a Native American -- to leave at once.

Saturday, July 19, 2014

When Economists are Irrational...

Meet our new dog, Jake.
 
Jake is from Wolf Point, Montana which is 2,270 miles from my front door.
 
On July 11th we were driving across northern Montana when I decided to stop for gas before we hit a long stretch of nothing.
 
I heard my wife say, "Ahhhhh, he's sooooo cute!!!" a few seconds after she got out of our car.  I thought maybe she was talking about me but how cute can anyone be pumping gas?
 
When I came out of the gas station she was holding this Golden Retriever/English Setter mix puppy. 
 
Uh, oh.
 
Surely this was going to be one of those few seconds of fun and then we would move on towards Florida.  After all, 2,270 miles with a puppy is exactly 2,270 miles of potential disaster at every turn.
 
She would not put him down.
 
I then had to "go all economist" on her and start sentences with words like, "Do you understand...." and "Have you thought about......" and "A dog means that........"
 
She did not hear a word.  No matter what cost-benefit calcuation I conjoured up, she just looked up at me like a four-year old girl and said, "But he's so cute."
 
Case closed.
 
She even said, as she got in the car with him, "Let's just get in the car and figure this out as we go along."
 
2,270 miles later Jake is adjusting to humidity, fire ants and the joys of air conditioning while we are adjusting to pee on the floor, running around at 2:00 in the morning and the $1,130 in fencing that is going in next week.
 
But he is so cute.
 
Note:  Some of you might be wondering, "How did they know if he belonged to anyone in Montana"? 
 
Good question.  He had no collar, was underfed and had been hanging around there for awhile according to some residents of the small town.  Now he has a collar, is eating everything and is hanging around our house.
 
Wish us luck.