Immediately after the Iowa Straw Poll last August, the noted and respected journalist George Will referred to the FairTax believers who supported Mike Huckabee as “those FairTax people.” He made it sound as if the people who helped Huckabee finish an unexpected second place among Republican presidential contenders were politically challenged, unfit to associate with the political elites. Jay Bookman, a columnist with the Atlanta Journal-Constitution , referred to the FairTax believers in his editorial on Dec. 23, 2007, as a “cult.” He called it “Huckabee’s Fantasy FairTax” as Huckabee was surging in the unreliable presidential polls leading up to... continue reading
The good news is that voters obviously have some desire for a better tax system. The flat has been promoted by presidential candidates as diverse as Jerry Brown (1992) and Steve Forbes (1996 and 2000). This year, the national sales tax is getting attention because of Mike Huckabee’s Iowa victory. The bad news is that the American people have not yet chosen to nominate a pro-tax reform candidate and we are still stuck with the internal revenue code. This is unfortunate since economists have long argued that America's multiple-rate, loophole-ridden tax code penalizes productive behavior and undermines national competitiveness. One... continue reading
Up or down? Nobody really knows, if you’re talking about the economy. There are tons of predictions about what will happen in 2008 – everything from “recession” from much of the media to market maniac Jim Cramer predicting “sunny skies.” Gas prices are supposed to go up to $3.50 this spring, according to the Energy Information Administration. Or even $4 by February, if you believe NBC. But the truth of the matter remains, nobody knows. Americans are worried, many believing that what goes up must come down. The economy is surpassing Iraq as the No. 1 issue with voters thanks,... continue reading
Views side by side : read A Mortgage Bailout? by Brian Wesbury and Robert Stein for another view, and BMI Adviser Gary Wolfram's Econ 101: The Problem with Bailouts . Last week President Bush and Treasury Secretary Paulson announced that the major players in the mortgage credit disruption had come to a consensus on how to move forward. They pointed to a statement put out by the American Securitization Forum which represents the people who own and who service the vast majority of American mortgages. The General and Financial press sprung into action, labeled it a bail-out, and went on... continue reading
Views side by side : read MSM Misses on Mortgage Rescue by Jerry Bowyer for another view, and BMI Adviser Gary Wolfram's Econ 101: The Problem with Bailouts . The Bush Administration proposal to assist homeowners who face mortgage resets violates many principles of free market economics. It involves the government in picking winners and losers and it interferes with private contracts – a cornerstone of freedom. In addition, while it may help some individuals, the economy as a whole is not in need of saving. Fourth quarter growth should come in around 2 percent, and unlike the conventional wisdom,... continue reading
Once upon a time, Bob Hope and Bing Crosby went off on the road to Bali. Fifty-five years later, politicians are heading to Bali for sun, sand and socialism – and they want us to pay for it to the tune of trillions of dollars. The Financial Times reported November 28 that the United Nations expects “rich industrialized countries shouldering a cut of 80 percent” of emissions. In effect, eco-extremists want the U.S. to spend hundreds of billions of dollars each year. The U.N. position makes us pay and lets China and India almost off the hook, despite their growing... continue reading
The media have been concerned about the falling value of the dollar and what may be causing it. One example that hits close to home here in Michigan is that the U.S. dollar is now worth less than the Canadian dollar. This is akin to the Detroit Red Wings losing 8-0 to the Montreal Canadiens. But currency markets are much like the market for any other goods. If the supply of one currency rises relative to the demand for that currency, then its price will fall. How does this work in exchange rate terms? To follow with the Canadian example,... continue reading
Is the glass half-full or half-empty? The classic question is a good way to look at the economy. Even economists don’t agree whether we’re in a “crisis” and a recession looms, or we’ve turned a corner and things are getting better. The only people who appear to be sure of what’s going on in the economy are journalists who feed the “crisis” idea to an unwitting public. The media have warned of recession or even depression throughout a 49-month run of positive job growth. But never more than in September when it briefly looked like that streak had ended. The... continue reading
The Republican debates have been a bit of a disappointment, at least for those seeking a Reaganesque vision of smaller government and economic liberty. Even the recent debate in Michigan, which was supposed to focus on economic issues, was less than illuminating. The major GOP candidates largely have confined themselves to generic statements in favor of smaller government, less waste, and extending the Bush tax cuts. Nothing is wrong with those concepts, to be sure, but the GOP has lost a lot of credibility on economic issues. During the Bush years, the size and scope of the state has expanded... continue reading
Consider Michigan. Michigan has been mired for several years in an economic slump. Its unemployment rate is the highest in the nation, 60 percent above the national average. Forbes magazine has ranked Michigan 46 th in the Best States for Business. It’s the only state in the country whose state GDP actually fell according to the latest data. The United Van Lines Migration Study had Michigan tied for first in outbound migration. It ranks 48 th in population growth. It’s among the worst states for home foreclosures; the poverty rate is above the national average; and the list goes on... continue reading