Overregulation: The problem we can’t outproduce (with some words from Reagan)

Death Star.

In the period between 1950 and about 2005, Americans continuously sustained a hefty downpayment on our federal, state, and local governments’ spiraling debt, by upping our productivity, our economic output, and the scope of opportunity for everyone.

Overregulation and implied state ownership of what we produce has been a problem for us since Woodrow Wilson’s terms in office.  But until the last half-decade, the American people shouldered and outproduced greater and greater burdens of regulation and/or taxation, costly credit and inflation, and victim politics and litigation.  Operating in the conditions of relative economic and political freedom – more than most of the world, if not more than in our own past – the American people were a productivity engine unmatched in the history of man.  Spend more?  We’ll produce more.  Continue reading “Overregulation: The problem we can’t outproduce (with some words from Reagan)”

Athens, Europe, America: The inverted triumph of Marxism?

Let the people work.

Ed Morrissey writes today about the burning of Athens after the Greek parliament passed the austerity measures demanded for the EU bailout.  He is quite correct that the Greeks need to reassess their own attitudes about a number of things, but I’m not sure we have all understood the most important thing the Greeks – and other Europeans, and Americans; in fact, the entire Western world – need to get over.

Most American pundits address the problem in terms of the Greeks (and undoubtedly some other Europeans) demanding “goodies” from the “government.”  And they are not wrong about that, but the refrain is an incomplete depiction of what’s at work with the public-debt implosion of the West. Continue reading “Athens, Europe, America: The inverted triumph of Marxism?”

Ears of Tin: The silly, if important, “Bain” controversy and why it matters

Not giving the people what they want.

What does it mean that almost everyone in the GOP race looks kind of icky in this Sudden Bain Eruption?  Gingrich, Perry, and Huntsman have all piled on with demagoguery about Romney and Bain, depicting Bain Capital as a soulless corporate predator, like the fictional company whose owner Richard Gere portrayed in Pretty Woman.  In one scene from that movie, Julia Roberts’ character, Vivian, asks Gere’s (Edward Lewis) about his business: Continue reading “Ears of Tin: The silly, if important, “Bain” controversy and why it matters”

We have a regulation problem, not a revenue problem

The biggest revenue slayer.

Pace my colleague Jazz Shaw, who on 6 July defends the proposition that we have a revenue problem, I say we don’t.  Our problem today is a regulation problem, and until we fix that, tinkering with tax rates will only make things worse.

It should go without saying, but I’ll say it again, that increasing tax rates does not produce a commensurate increase in revenues.  The truth about tax rates is that raising them produces a less-than-proportional increase in revenues, whereas lowering them produces a greater-than-proportional increase in revenues.  Tax rate changes do not produce a one-for-one change in revenue levels, period.  Arguments are usually made as if they do, but history demonstrates otherwise.  You cannot solve a public debt problem by raising tax rates.

The chief reason for this is that people Continue reading “We have a regulation problem, not a revenue problem”

Greece (and the West): Enlarge the pie, already

Phoenix or pterodactyl?

It is sadly predictable that as the Eurozone nations negotiate a solution to Greece’s government debt crisis, the focus is entirely on “increasing revenue” through tax adjustments and “cutting spending” in a crude, linear manner.

The Greek problem

There is no doubt that these measures represent a part of the solution.  But they are incredibly discouraging for Greeks who have no freedom to do anything other than participate in their nation’s appallingly dysfunctional economy.  Almost anywhere else in the developed world, people of working age perceive themselves to have better opportunities.  There is something legal to do, other than continue at (or angle for) public-sector jobs that promise only to pay less in the future, with pension benefits turning from iffy to completely unreliable.

Greeks facing pay cuts in the public sector can’t just go home and polish up their resumes for the three dozen private companies that might want to hire them. Continue reading “Greece (and the West): Enlarge the pie, already”