Category Archives: Economy

UPDATED: Fiscal Deficit Attributable To Immigration (Ad Hominen Fallacy)

According to Edwin Rubenstein, President of ESR Research Economic Consultants in Indianapolis, the average immigrant household generates a deficit of about $17,000 per immigrant household. This figure is a function of the difference between federal benefits received and federal taxes paid. Whereas it used to be “that native-born households generated a federal fiscal surplus—paying more taxes than they received in benefits,” this is no longer the case. “Today’s deficit,” Rubenstein acknowledges, “is too large to be ascribed to any narrowly defined group.” Everyone is in hock. “Food Stamp Nation,” as Pat Buchanan puts it in his latest, admirable book.

Nevertheless, as I’ve previously argued, “from the fact that taxpayer-funded welfare for nationals is morally wrong … it does not follow that extending it to millions of unviable non-nationals is economically and morally negligible. Or that such immigration remotely comports with the libertarian goal of curtailing government growth.” It’s like saying that because a bank has been robbed by one band of bandits (welfare-dependent nationals), repelling the next lot (welfare-dependent non-nationals) is unnecessary given that the damage has already been done.

Rubenstein:

There are about 13 million such households in the U.S. Well, when you do the math—13 million times $17,000—you get a federal “immigration deficit” of $220 billion.
That is the fiscal deficit attributable to immigration. It equals about 17% of the entire federal deficit.
That is a big chunk. It’s roughly equal the annual interest now paid on the national debt.

UPDATE (Oct. 20): To James below, I’m glad you wrote: Subscribe to my newsletter, James. In my next WND column, I give you the tools to counter the false argument your kids ought to have been taught at school not to make. Against your numbers, your kids have advanced the ad hominen fallacy. Read tonight’s WND column and join us here.

UPDATE II: 999 Or 666?

Economy, Elections, Politics, Republicans, Taxation

“When you take the 999 plan and turn it upside down (666); the devil’s in the details.”—Michele Bachmann.

Here’s Bachmann’s brilliant quip in it entirety, excerpted from “The Hanover Economic Debate.” [YouTube of the beautiful Minnesota Congresswoman follows.]

BACHMANN: “I would have to say that the 999 plan isn’t a jobs plan, it is a tax plan. And I would say that from my experience being in Congress, but also as a federal tax lawyer, when you — the last thing you would do is give Congress another pipeline of a revenue stream. And this gives Congress a pipeline in a sales tax. A sales tax can also lead to value-added tax. The United States Congress put into place the Spanish-American War tax in 1888. We only partially repealed that in 2006. So once you get a new revenue stream, you are never going to get rid of it.

And one thing I would say is, when you take the 999 plan and you turn it upside down, I think the devil is in the details.”

UPDATE I (Oct. 15): Peter Schiff says 999 offers a substantial reduction in the corporate rate of income tax which is a positive thing (naturally). Schiff also credits Cain with intending to move toward the abolition of tax on income and toward replacing the income tax with some tariff-like national sales tax. So far so good, says Schiff. However, corporations will have to pay a 9 percent tax on profits as well as on their payroll. 999 is a hidden payroll tax. That’s a new thing. And it’s bad, says Schiff.

UPDATE II (Oct. 16): More about the 9-9-9 plan from Bruce Bartlett (whom I once praised for aiming a shot across the bows of Bush’s bastardized “conservatism” before it was allowable).

No mention is made on the site of a tax cut for those now in the 10 percent, 15 percent or 25 percent brackets. This means that the only people who would get a tax rate cut are those now in the 28 percent, 33 percent or 35 percent brackets. According to the Joint Committee on Taxation, only 4 percent of taxpayers pay any taxes at those rates.
As for corporations, Mr. Cain’s proposal is primarily going to benefit those with revenues of more than $1 million a year, because they account for 98.7 percent of all receipts by C corporations. (A C corporation is a legal entity separate and distinct from its owners that is taxed as a corporation; its shareholders pay taxes individually on their gains.) Those companies with receipts over $50 million account for 88.8 percent of total receipts.
Other business entities — sole proprietorships, S corporations (which have between 1 and 100 shareholders and pass through net income or losses to shareholders) and partnerships — would not benefit because they are not taxed on the corporate schedule. But they represent 92 percent of all businesses.
Second, Mr. Cain would eliminate all taxes on profits earned by multinational corporations outside the United States. It’s hard to know the impact of this provision, but according to Martin Sullivan, an economist with Tax Analysts, the 50 largest corporations in the United States generated half of their profits in other countries.

Read the rest of Bartlett’s substantive analysis of 999.

Steven Jobs – Capitalist Hero

BAB's A List, Business, Capitalism, Celebrity, Classical Liberalism, Economy, Ethics, Fascism, Human Accomplishment, Intelligence, Technology

By MYRON PAULI

MYRON PAULI explains what separates Steven Jobs, the quintessential “Homo Aynrandis,” from Homo Corporatist, that atavistic throwback that manages the typical corporation nowadays.

ONCE UPON A TIME, great men like the late Steven Jobs (Homo Aynrandis) roamed about in our early republics (note the plural – each state has a republican form of government) – men like Morse, Fulton, Edison, Whitney. These were creators and innovators who helped mankind by helping themselves – not because some bureaucrat put a gun to their heads. They made money through their inventiveness and vision, not by “manipulating the system.”

Nearly all of these early Howard Roarks (the hero in Ayn Rand’s Fountainhead) were self-educated. They made their fame and fortune in spite of “the system.” College dropout Jobs was one of these great men and let us hope not the last.

Nowadays, we have a different species of capitalist, Homo Corporatist, “managing” most companies – usually for personal gain and short-term profit – into oblivion. They are often spoiled rich kids who smoke dope through college and then get educational “credentials” in “management” and economics from neo-Marxist pedagogues teaching Keynes, Krugman, Samuelson etc. These corporate-technocratic-idiot-savants work their way into companies, sucking up to the vampires who mismanage these companies, and then get hired as CEOs.

Jobs made that mistake in hiring John Sculley from Pepsi and the soda salesman soon manipulated Jobs out of Apple. Later Apple sued Jobs, whose quote, “It is hard to think that a $2 billion company with 4,300-plus people couldn’t compete with six people in blue jeans,” says all one needs to know about those characters and the modern era.

But Jobs was down but not out. He made Next and Pixar and out-Appled Apple until they took him back and resumed growing. The alternative for Apple would have been to hire the type of corporate flacks who have mismanaged General Motors for the last 70 years.

As for Homo Corporatist – they are excellent in claiming hundreds of millions of dollars in bonuses while their companies slide into oblivion. Thomas Edison founded General Electric whose products were found in nearly every American home – now the company is “managed” by Harvard M.B.A. Jeffrey Immelt. Instead of watching GE televisions, Americans now watch GE’s Rachel Maddow spouting inane nonsense on Korean televisions. GE has become a bubble-manipulating finance company which lobbies for tax breaks and “green energy mandates” from its political buddies.

Homo Corporatist, sadly, is ubiquitous. In China and Russia, they are the children of the old party apparatchiks who now play “businessman” in a fascist economy. In the Arab world, they are the relatives and friends of the King/Sheik/Dictator now operating various “enterprises.” In America, it is Archer Daniels Midland with their agribusiness “ethanol mandates.” It is people like my Senator, Mark Warner, who made money off the FCC monopolistic licenses. It is people like Merrill Lynch’s Stan O’Neal, an egomaniac who had security guards holding an entire elevator bank open for him and ran off with well over $100 million, while sinking “bullish” Merrill with subprime mortgages before moving on to Alcoa whose stock has also tanked.

Most of these managers know less about the products that the companies make than their janitors. They make short term profits by firing research staff, selling ideas and marketing opportunities overseas, and finding quick-fix gimmicks, as they pocket the bonuses, and lobby against competitors – and like good vampires, move on to the next target. Some might be better than others – but can Herman Cain (Federal Reserve Bank leader) cook a pizza??

At my first company after graduate school, the big shots were shorting their own stock to the Employee’s Stock Plan (!); they paid 20 percent to borrow money in 1982 to buy up a company at over 50 times price-to-earnings, and then sacked most of the company, bribed government officials and covered it up, then pleaded “no contest” to the bribes with some leaving the companies with golden-parachute bonuses while the “lower animals” at the company got furloughs and had to take ethics training to not do what the big shots had done – all while the company stock plummeted from 45 to 3! While my years in the employ of the government reinforce my libertarianism, I could see how people in companies like this could wind up as Marxists!

Steven Jobs, Homo Aynrandis, will be missed. He was what capitalism should be about.

**
MYRON PAULI, Ph.D., grew up in Sunnyside Queens, went off to college in Cleveland and then spent time in a mental institution in Cambridge MA (MIT) with Benjamin Netanyahu (did not know him), and others until he was released with the “hostages” and Jimmy Carter on January 20, 1981, having defended his dissertation in nuclear physics. Most of the time since, he has worked on infrared sensors, mainly at Naval Research Laboratory in Washington DC. He was NOT named after Ron Paul but is distantly related to physicist Wolftgang Pauli; unfortunately, only the “good looks” were handed down and not the brains. He writes assorted song lyrics and essays reflecting his cynicism and classical liberalism.

UPDATE II: Protesters: Walking Ads For Bounty Business Creates (Kanye Joins Smelly Rally)

Business, Capitalism, Economy, Free Markets, Government, Technology, Trade

This detailed image titled “Down With Evil Corporations,” via LRC.COM, depicts the walking contradiction that the potentially violent Wall-Street protesters embody. The clothes they wear, the devices they use to communicate and transmit their (mostly) sub-intelligent message, the food they buy cheaply at the corner stand to sustain their efforts—these are all produced, facilitated or brought to market by the invisible hand these unproductive people wish to lop-off.

CLICK TO ENLARGE:

UPDATE I (Oct. Eighth): Myron you’re confused; your reasoning is backward. Corporations don’t have the powers you attribute them; to the extent that they have this list of powers you wrongly imbue them with—they got them from government. If government stuck to its constitutional (originalist) mandate, all else would fall into place. The feats you ascribe to companies are only ever made possible by state edict. I’m surprised you don’t see that Perry didn’t have to accept a bribe, the government doesn’t have to grant Microsoft all the H-1B visas it wants (while the IEEE reports that 4 percent of American engineers are unemployed), it doesn’t have to recapitalize the big banks, etc, etc.

UPDATE II (Oct. 11): Rapper Kanye West drops in on the Smelly Rally (“Occupy Wall Street”) “wearing $355 GIVENCHY shirt” and lots of gold, all fashioned by business for his pleasure.