Tag: economics

Who owns the future?

Pat Buchanan observes that the central struggle for the future of the West is now between globalists and nationalists:

Robert Bartley, the late editorial page editor of The Wall Street Journal, was a free trade zealot who for decades championed a five-word amendment to the Constitution: “There shall be open borders.”

Bartley accepted what the erasure of America’s borders and an endless influx or foreign peoples and goods would mean for his country.

Said Bartley, “I think the nation-state is finished.”

His vision and ideology had a long pedigree.

This free trade, open borders cult first flowered in 18th-century Britain. The St. Paul of this post-Christian faith was Richard Cobden, who mesmerized elites with the grandeur of his vision and the power of his rhetoric.

In Free Trade Hall in Manchester, Jan. 15, 1846, the crowd was so immense the seats had to be removed. There, Cobden thundered:

“I look farther; I see in the Free Trade principle that which shall act on the moral world as the principle of gravitation in the universe — drawing men together, thrusting aside the antagonisms of race, and creed, and language, and uniting us in the bonds of eternal peace.”

Britain converted to this utopian faith and threw open her markets to the world. Across the Atlantic, however, another system, that would be known as the “American System,” had been embraced.

The second bill signed by President Washington was the Tariff Act of 1789. Said the Founding Father of his country in his first address to Congress: “A free people … should promote such manufactures as tend to make them independent on others for essential, particularly military supplies.”

What is disturbing to me is how fundamentally dishonest the advocates of free trade are. The more intelligent and insightful of them know that what they are advocating necessarily means the end of the nation-state and the end of the nations, but they are intent on hiding that reality because they know how unpopular it is with the vast majority of the population in every nation.

Sure, if you press them hard enough they will admit that national borders are just “a line on a map” and that they don’t care at all about their fellow citizens, but they certainly aren’t going to publicly own up to the destruction that is inherent in their economic vision.

But the globalists will fail for the same reason that the communists failed and the feminists are failing. Eventually, the weight of the contradictions and the falsehoods will cause their system to collapse.

The future belongs to the nations. Deus le vult.

Disproving pay discrimination… again

Uber’s objective, driver-controlled pay system still produces a pay gap:

The mainstream media also continues to cite the pay gap as a problem, disregarding evidence that it’s merely the result of free choice. Recently, an even more convincing rebuttal has arisen from the tech sector.

Uber, which pays its drivers not on an inherently subjective individual basis but via a formula that takes into account time and mileage driven, still has a 7 percent pay gap between male and female drivers. That’s right: a company that allocates salary in a way that is necessarily blind to an employee’s sex has still generated a pay gap, because men and women make different choices.

It turns out that female Uber drivers work shorter hours, are less likely to work during peak times, and drive more slowly. Because the compensation structure is automatic, Stanford researchers were able to pin down the three factors that caused the gap: experience on the platform, willingness to work at peak times and in busy areas, and driving speed preferences.

Somehow, I doubt these facts will even act as a speed bump to feminists rushing to denounce Uber’s sexist pay gap. Still, it would be interesting to see how race and other factors affect average pay.

The money drain

Immigration is more than just war. It is also a very expensive form of foreign aid.

According to a recent Pew Research report, records from The World Bank show that migrants residing in the U.S. sent a staggering $138,165,000,000 (USD) to family members in their home countries in 2016 alone. To name the top three countries that received the most in remittances, funds flowed out of the U.S. in the amounts of $1,754,000,000 to Mexico, $655,000,000 to Canada, and $459,000,000 to the United Kingdom. $28,126,000,000 to Mexico, China $15,418,000,000 to China, and $10,657,000,000 to India.

Keep in mind that the estimated annual economic effect of immigrants, whether positive or negative, is generally considered to be less than one percent of GDP. Since US GDP was 18 trillion in 2016, and since these remittances are NOT included in those estimates, that means that these remittances either a) cancel out the positive effects or b) double the negative effects.

There is no longer any question that immigration is not only bad for the nation and bad for society, it is bad for the economy too.

UPDATE: The author of the article confused incoming remittances with outgoing. Corrected from the original data.

Taking the CON out of economics

Written by the greatest living economist, Steve Keen, one of the few professional economists to have correctly anticipated the global financial crisis of 2008, eCONcomics is a series of three satires explaining why the science of economics has gone so terribly wrong.

In these savagely erudite satires, Keen highlights the lameness of the excuses offered by economists for their failure to predict anything from the financial crisis to the recent stock market highs. From “secular stagnation” to the “non-accelerating inflation rate of employment” and the “full employment real interest rate”, Keen expertly mocks both the myths and the incompetence of his professional colleagues.

After reading eCONcomics, you will understand why no economist ever seems to be able to explain what is going on today, or tell you what will happen tomorrow.

Steve Keen is Professor of Economics at Kingston University in London, and an Honorary Professor at University College London.

32 pages. $3.99. eCONcomics: Taking the CON out of Economics is available via Kindle and Kindle Unlimited.

And yes, there is a very good chance that Prof. Keen and I will collaborate on an eCONcomics devoted to the subject of free trade in the coming year. We may disagree on a number of issues, but free trade is not one of them.

A cover, revised

We decided to redo the QUANTUM MORTIS A Man Disrupted #1 cover for the print edition since we wanted something a little more eye-catching for the stores. The Amazon Kindle edition has already been updated. The colorist who did this will also be coloring QMAMD #2 and the subsequent issues. And I’m very pleased to be able to announce that we will soon be publishing a economics comic book written by none other than Steve Keen himself. The two of us intend to collaborate on another one… I expect you may be able to guess the specific subject.

Anyhow, we will always seek to continue improving our game. This is just the first iterative step. And since we’re on the subject of comics, don’t forget that there are just three days left in the Will Caligan’s Comic campaign. We’re less than $19k away from a third full-color graphic novel!

20 years of comics sales

Now that the year-end results are in, we can take a look at the current state of the conventional comics industry. The data is flawed and incomplete, but vastly better than the data we use to analyze GDP or trade statistics, so it’s a useful illustration of how the industry has changed over the last 20 years.

First and foremost, what this tells me is that ALL of the perceived growth in the market has been the result of price inflation. In 20 years, dollars are up 26.2 percent while unit sales are down 20.5 percent. Taken in combination, that is a very close match to the 56 percent inflation reported over the same time period for the Consumer Price Index. For all that fans understandably complain about 20-page books and the rise to $3.99 prices, the industry actually hasn’t kept pace with general consumer inflation.

Second, the initial decline was the result of Marvel’s failed attempt to enter the distribution business that was followed by Diamond establishing its monopoly over the comic book stores. My surmise is that the slow recovery in unit sales, from 67 million in 2001 and 69 million in 2010, is largely the consequence of Diamond using its monopoly position to force overstocking on the stores. (Remember, even though the dollars reported are retail, these units represent Diamond’s sales into the stores, not actual sales to the final consumer.) This forced overstocking puts increased financial pressure on the stores and leads to periodic store failures. Given that 50 stores, representing between 1.5 and 3 percent of the total number of stores, failed in 2017 alone, that means those previous unit sale bottoms will probably be tested in 2019.

This store failure cycle will likely be exacerbated by the steep dollar decline from 2015, which is almost certainly reflective of the SJWs at the Big Two getting out of hand and reducing demand for the highest-priced comics that have been affected by their antics. Diamond’s distribution policies are currently mitigating the effects of that reduced demand, but it is likely to start showing up in 2018. I would expect Top 300 unit sales to fall to 72 million next year; if they go below 70 million, things are going to get worse faster than anyone in the industry probably anticipates.

Past declines in unit sales exceeded the percentage decline in dollars. But since 2015, that relationship has been reversed, with dollars down 12.7 percent from 2015 to 10.6 for units. That means that it is the elite products that normally drive industry demand that are suffering the biggest decline.

This is an industry that is more than just ripe for disruption, it is practically screaming out for it. It’s not dying, it is merely changing. And with your help, that’s exactly what we’re going to do: disrupt and change the industry. Note that with 494 copies sold, that would be enough to put Will Caligan’s first graphic novel at #198 on the December 2017 chart. Three not-entirely-unrelated notes:

  • We’re only $1,600 $800 $300 away from coloring Will Caligan’s second graphic novel and three backers short of 500 have hit the 500 backers mark. We have a great colorist signed up for it, so let’s nail that down today!
  • Yesterday, I received the first test print for QUANTUM MORTIS A Man Disrupted #1: By the Book. It looks great. It’s not a true comic book, but a 24-page full-color trade paperback. So, it’s a little smaller – the same royal octavo size as the ATOB paperback, only a LOT thinner – but is considerably more durable than the conventional comic book. And it will retail at a very competitive price of $2.99. By the way, that will not be the final cover, as we’ve revised it considerably and will do it glossy instead of matte as shown below.
  • As the backers know, we are making great progress on both Alt★Hero #1 and Chuck Dixon’s Avalon #1. Both will be out in digital editions and possibly print editions in February.

Winning: corporate tax edition

Say what you will about the God-Emperor, but his policies actually work as designed:

Apple just announced on Wednesday it will bring back hundreds of billions of dollars from overseas to fund investment in the U.S. and likely increase its capital returns.

“Apple, already the largest US taxpayer, anticipates repatriation tax payments of approximately $38 billion as required by recent changes to the tax law. A payment of that size would likely be the largest of its kind ever made,” the company said in the release.

Using the new 15.5 percent repatriation tax rate, the $38 billion tax payment disclosed by Apple means they are planning a $245 billion repatriation.

The tax overhaul, which President Donald Trump signed into law last month, also lowered the corporate tax rate to 21 percent from 35 percent.

After the repatriation tax payment, the company will have $207 billion left over from the move it can use for investments, acquisitions, stock buybacks or larger dividends. Apple said it plans more than $30 billion in capital expenditures in the U.S. during the next five years.

Apple had $252.3 billion in overseas cash as of the end of September quarter, according to SEC filings, so that means the company is paying tax on nearly all of that foreign cash.

$38 billion is a lot of money. And I note that it’s considerably more than the $21.6 billion the Department of Homeland Security said it would cost to build a big beautiful wall on the southern border.

Also, there are going to be some very sad European bankers and investment managers this morning. All those glorious fees gone in the blink of an eye. No wonder they hate the God-Emperor so much. It was very smart to make the repatriation fee even lower than the reduced corporate tax fee.

Why socialism doesn’t work

The Hoover Institution publishes an unusually good casual explication of the real reason socialism not only does not work, but cannot work: the Impossibility of Socialist Calculation:

After gaining power a century ago and then holding onto it through a civil war, the Soviet communists were intent on building a socialist state that would overwhelm capitalism. State ownership and scientific planning would replace the anarchy of the market. Material benefits would accrue to the working class. An equitable economy would supplant capitalist exploitation and a new socialist man would rise, prioritizing social above private interests. A dictatorship of the proletariat would guarantee the interests of the working class. Instead of extracting surpluses from workers, the socialist state would take tribute from capitalists to finance the building of socialism.

The basics of the Soviet “horse” were in place by the early 1930s. Under this system, Stalin and his Politburo set general priorities for industrial ministries and a state planning commission. The ministers and planners worked in tandem to draw up economic plans. Managers of the hundreds of thousands of plants, factories, food stores, and even farms were obligated by law to fulfill the plans handed down by their superiors.

The Soviets launched their planned socialist economy as the capitalist world sank into depression, trade wars, and hyperinflation. Soviet authorities bragged of unprecedented rates of growth. New industrial complexes grew from scratch. Magazines featured contented workers lounging in comfortable resorts. The message: The West was failing, and the Soviet economic system was the way to the future.

As the competition between capitalism and Soviet socialism became more pronounced during the Cold War, serious scholarly study of the Soviet economy began. The overarching research agenda of Western scholars was “scientific planning”—the socialist belief that expert technocrats could manage an economy better than spontaneous market forces. After all, would not experts know better than buyers and sellers what, how, and for whom to produce?

It was the Austrian economists F. A. Hayek and Ludwig von Mises who resisted this idea most forcefully. In their landmark critique laid out in a series of papers written from the 1920s through the 1940s, they concluded that socialism must fail. In modern economies, hundreds of thousands of enterprises produce millions of products. Even with the most sophisticated computer technology, managing such large numbers would be far too complex for an administrative body trying to allocate resources. Modern economies, therefore, are too complex to plan. Without markets and prices, decision-makers will not know what is scarce and what is abundant. If property belongs to all, what rules should those who manage assets for society follow?

The Soviets’ solution to the complexity and information problems was a national plan that spelled out production goals only for broad sectors, not for specific transactions. In other words, rather than mandate the delivery of 10 tons of steel cable by factory A to factory B, the planners set a target for the total number of tons of cable to be produced nationwide. Only a few specific goods—such as crude oil, aluminum ore, brown coal, electricity, and freight-car dispatches—could be planned as actual transactions. Everything else had to be planned in crude quantities, such as several million square meters of textile products. Product specifications, delivery plans, and payments were worked out at lower levels and often with disastrous results.

Soviet scientific planning, in fact, directed only a minuscule portion of products. In the early 1950s, central agencies drew up less than 10,000 planned indexes, while industrial products numbered more than 20 million. Central agencies drew up generalized plans for industrial ministries, which issued more detailed plans to “main administrations,” which prepared plans for enterprises. There never was a pretense that the top officials would plan the production of specific products.

To make matters even more complicated, virtually all plans were “drafts” that could be changed at any time by higher state and party officials. This constant intervention, called “petty tutelage,” was an irritant from the first to the last day of the Soviet system, but it was a key pillar of resource allocation.

If you want to read some truly artistic masterpieces of illogic, read a few socialist papers attempt to prove that socialist price-calculation is possible. The two primary papers, written first by Mises, then further articulated by Hayek, are two of the most conclusively devastating critiques of anything ever published. And the empirical evidence subsequently gathered over decades resoundingly supported their logical conclusion.

It’s not an accident that the Impossibility of Social Justice Convergence sounds a lot like the Mises-Hayek law.

No worries, they’ve got immigrants

Surely they will be more than up to the burden of shouldering the tax load:

According to the Daily Caller, three states, in particular, saw a massive departure of Americans to the tune of 450,000, taking their wallets with them as they fled. This is leading to the problem of having no one around to pay the bills in these tax-heavy states.

The Daily Caller reported that taking the lead is New York:

The exodus of residents was most pronounced in New York, which saw about 190,000 people leave the state between July 1, 2016 and July 1, 2017, according to U.S. Census Bureau data released last week.

New York’s domestic out-migration during that time period was about the same as it was in the same time 2015 and 2016. Since 2010, the state’s outflow of just over 1 million residents has exceeded that of every other state, both in absolute terms and as a share of population, according to the free-market think tank Empire Center.

Despite the number of people leaving New York, the population did grow due to high immigration from other parts of the world, and a higher birth rate.

California is yet another deep blue state that found itself watching Americans take their money with them as they left:

California was the third deep blue state to experience significant domestic out-migration between July 2016 and July 2017, and it couldn’t blame the outflow on retirees searching for a more agreeable climate. About 138,000 residents left the state during that time period, second only to New York.

But like New York, California’s population only grew due to a heavy flow of international migration to the state:

However, because California was the top receiving state for international migrants, its net migration was actually 27,000. Add to that number a “natural increase” of 214,000 people, and California’s population grew by about just over 240,000, according to the Census Bureau.

Both New York and California’s population growth may or may not help them. The tax status of the immigrants replacing the taxpayers that flee the states may range from completely legitimate, to non-tax paying status depending on the immigrants’ level of income or legality. According to CNN, most new immigrants into the country work lower paying jobs, and with those workers paying little to no taxes, the burden on the high-tax deep blue states could get even worse.

It’s amusing how people suddenly start talking very differently about the tax-paying abilities of immigrants when they realize that the state’s tax revenue is actually going to depend on them.

The problem is that these so-called “blue state” idiots are going to vote for exactly the same thing they’re fleeing now. No state should have ever allowed its new residents to vote on state and local matters for at least two generations, and preferably three.

They knew all along

Ronald Reagan and the Queen of England discussed economics and the prospects for the future in 1991.

The footage begins with the former president asking if the coffee being served is decaffeinated. The Queen calls replies ‘No, it’s ordinary’ before calling over a waiter to request some, then telling Mr Reagan ‘We try our best. It’s coming.’

Their conversation then turns to economics.  Mr Reagan, who finished his second term as president in 1989, told the British monarch: ‘Now if you’ve got two thirds… paying for the bureaucrats and give only one third to the needy people, something’s wrong there.’

The Queen responded by saying that ‘democracies are bankrupt’ because of such policies.

‘But you see all of the democracies are bankrupt now, because of the way the services have been planned for people to grab,’ she told him.

‘I know, we tried to get some of these things changed and reduce them,’ said Reagan.

‘For example, we have a rule to this day, that a supervisor’s salary is based on the number of people he supervises,’ he continued.

‘Well now, you have a group of people that have no interest in reducing the payroll, even if they can, because it will reduce their salary.’

The Queen, who had hosted the event for Florida’s grandest society including another former US president – Jimmy Carter – agreed.

‘Obviously, yes. It’s extraordinary, isn’t it? I think the next generation is going to have a very difficult time.’

The answer, obviously, was to flood the West with credit and third world immigrants, because monetary and population inflation are good for the economy. It’s interesting, though, that both public figures already knew that which eluded the public and most opinion-leaders for another 17 years.