Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Obama doubles down on green energy
Howard Richman, 5/14/2012
Until recentily, Spain was the leader in renewable green energy investment. When President Obama got elected, he sought to emulate the Spanish model, as he noted in his remarks to the press after meeting with Spanish President Zapatero on October 13, 2009:
(W)e pledged to work diligently to strengthen [our ties], particularly around key issues like renewable energy and transportation, where Spain has been a worldwide leader and the United States I think has enormous potential to move forward.
So how is Spain doing economically as a result of its huge investment in green energy. Not very well. It currently leads the eurozone with 24.1% unemployment accompanied by $58.1 billion trade deficits (according to statistics published in the May 5, 2012, issue of The Economist).
Why? A study by Gabriel Calzada Alvarez and his colleagues at Madrid's King Juan Carlos University calculated that Spain lost 2.2 jobs in other industries for every government-subsidized green job that was created. The problem is that renewable energy, being more expensive, wastes government resources while raising the overall cost of energy for local manufacturers. In the concluding section of their study, Alvarez and his colleagues explained:
This case is similar to the one that French economist Frédéric Bastiat denounced...
Saving Greece, Spain, Portugal, Italy, France, and the U.S. From Bankruptcy
Raymond Richman, 5/13/2012
Greece, Spain, Portugal, Italy, France and the U.S. are close to bankruptcy and they all have the same causes: profligate government, large trade deficits, and bewildered economists. They are dysfunctional and incapable of doing what is necessary to survive as prosperous nations. By contrast, Germany, China, and Japan are doing very well. As the following table reveals, the countries on the list that face economic collapse are those with large trade deficits and the countries doing well are those with large trade surpluses. No revolution is required for the former to resolve their problems.
That the troubles of Greece and the other eurozone countries and the recession in the U.S. are related to their trade deficits is evidenced in the following table relating the level of employment in various countries to their current-accounts balance:
First, note that all the countries with unemployment rates above 7% have current-account balance deficits while all of the countries with unemployment rates below 7% have current account surpluses.... |
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U.S. net exports fell in March
Howard Richman, 5/10/2012
The Commerce Department released the latest trade statistics this morning and the data were quite negative. U.S. net exports of goods and services fell from a seasonally adjusted negative $45.1 billion in February to a negative $51.8 billion in March. If multiplied by 12, the March data would be the equivalent to a negative $622 billion net exports per year.
Here Comes the Made-in-China Cadillac - we're published in today's American Thinker
Howard Richman, 5/9/2012
We begin:
It's déjà vu all over again! GM again caves to Chinese pressure. In September it was the electric car. In April it was the Cadillac.
The Chinese government made its latest move in December. That's when The Guardian reported that the Chinese government raised its already high 25% tariff upon American-made vehicles, concerned that increasing numbers of big-engine cars were being purchased by Chinese consumers:
Follow the following link to read it:
http://www.americanthinker.com/2012/05/here_comes_the_made-in-china_cadillac.html
Why Lawrence Summers failed
Howard Richman, 5/7/2012
In 2009 and early 2010, Lawrence Summers, then Director of President Obama’s National Economic Council, tried to engineer a Keynesian economic recovery that was to take place during the recovery summer of 2010. The Obama administration tried to boost the three primary components of aggregate demand at the same time: (1) Household Consumption, (2) Business Investment and (3) Government Purchases. They succeeded!
Unfortunately, Summers was a Keynesian who didn’t understand Keynes. In the chapter about mercantilism in his magnum opus (The General Theory of Employment Interest and Money), Keynes explained what happens to trade deficit countries:
(A) favorable balance, provided it is not too large, will prove extremely stimulating; whilst an unfavorable balance may soon produce a state of persistent depression. (p. 338)
Indeed the very trade deficits that Keynes warned about killed Summers’ recovery. The stimulus that President Obama was pumping into the economic tire leaked out. Summers was the tire repairman who pumps up a tire without fixing the leak.
If not for growing trade deficits, Summers’ Keynesian stimulus would have boosted the economy by 4.8% in the first quarter and 5.6% in the second quarter of 2010, as shown by the red line in the graph below. Such fast growth could have ignited business investment which could have sustained future growth. But due to growing trade deficits subtracting from demand for American products, the economy only grew at a 3.9% growth rate in the first quarter and 3.7% in the third quarter as shown by the blue line in the graph below:
U.S. Trade Deficit With China Grows While China’s Trade Surplus With World Diminishes – Is This Part of China’s World Strategy?
Raymond Richman, 5/5/2012
The International Monetary Fund, whose SDRs (special drawing rights) are a candidate to succeed the dollar as the world’s monetary standard, reported in early April that China’s enormous trade surplus with the world was narrowing. It failed to note that China's trade surplus with the U.S. continues to increase. Is this coincidence or deliberate policy? The Wall Street Journal hailed the notion that world imbalances were being corrected by market forces. That is in line with its ideology of "free trade" but it ignores the reality that China's trade surplus with the U.S. continues to increase.
In a recent analysis in the New York Times (5/1/2012), Eduardo Porter, a member of the Times editorial board, citing IMF sources, notes that the Chinese trade surplus had fallen from 10 percent of its GDP in 2007 to 2.8 percent in 2011. The U.S. trade deficit declined from 5.1 percent of GDP to 3.1 percent during the same period. The fact is that the worldwide recession in 2008-09, reduced the exports and imports of every large trading nation creating the impression that trade was being balanced. The IMF did succeed in blunting the increasing demand that China allow its yuan to appreciate to make imports cheaper and exports more expensive. The IMF made it appear that market forces were doing the job of bringing trade into balance. In fact, the effect of the recession was only temporary....
GM caves again -- will build Cadillacs in China
Howard Richman, 5/3/2012
In December, the British newspaper The Guardian reported that the Chinese government raised its already high 25% tariff upon American-made vehicles, concerned that a few American cars were still being purchased by Chinese consumers:
General Motors faces the greatest impact, almost 22% extra on some sports utility vehicles (SUVs) and other cars with engine capacities above 2.5 litres. Chrysler faces a 15% penalty, while a 2% levy will be imposed on BMW, whose US plants make many of the cars it exports to China.
Existing taxes and duties already push up the cost of US imports by 25%, and the new levies make it even more expensive for Chinese consumers to buy American....
This month, that measure had the desired effect. In a May 2 Huffington Post commentary (Commies in Cadillacs: GM Turns Chinese), economists Peter Navarro and Greg Autrey reported that GM will build luxury cars in China in order to sell to the Chinese market. They began:...
Geithner thinks his failed trade policy was a success
Howard Richman, 4/30/2012
In November 2010, when it became clear that his recovery summer had failed, Lawrence Summers resigned as Director of President Obama's National Economic Council. In contrast, Treasury Secretary Timothy Geithner still hasn't figured out that he has failed.
In a speech at the Commonwealth Club of California on April 26, Geithner claimed that the Obama administration's trade policy has succeeded, despite the 25 months of falling net goods exports with China shown in the graph below:
Near the beginning of the speech, he said:...
Does global warming cause extreme weather? - we're published in today's American Thinker
Howard Richman, 4/29/2012
Here's how we begin:
Anthropogenic global warming (AGW) theory supporters are in the midst of a big propaganda campaign leading to a global "Connect the Dots" day on May 5. Their goal is to convince the public that recent extreme weather events are due to global warming and that global warming is man-made.
They are preparing public opinion for the huge economic sacrifice involved in curbing carbon dioxide emissions, a process which they will demand at the United Nations Conference on Sustainable Development from June 20 through 22.
So far, their propaganda campaign has been succeeding. In fact, the New York Times reported on April 17 ("In Poll, Many Link Weather Extremes to Climate Change") that the public now believes stuff that the scientists who adhere to AGW theory don't even claim to be true:
To read it, go to:
http://www.americanthinker.com/2012/04/does_global_warming_cause_extreme_weather.html
Obama stopped the falling house prices (in Washington DC)
Howard Richman, 4/25/2012
Republicans do not give President Obama credit where credit is due. He stopped the fall off in house prices. When he took office in January 2009, house prices were falling rapidly. Both in Washington DC and in the nation they were 81% of what they had been just one year previously (after subtracting for inflation).
But President Obama almost completely halted that decline. In Washington DC, according to the Feb 2012 data released yesterday by S&P/Case-Shiller, house prices still held 96% of their January 2009 value. His success is shown in the following graph of real house prices (house prices after subtracting for inflation):
Bloomberg spins falling Case Shiller numbers as a positive trend
Howard Richman, 4/24/2012
This morning, S&P/Case-Shiller released their data for February sales and resales of the same homes. Bloomberg News spins these numbers as a positive sign (Oil rises as Case-Shiller report shows improvement). Their story begins:
Oil rose in New York after home prices in 20 U.S. cities dropped at a slower pace in February, bolstering optimism that economic expansion will accelerate in the world’s biggest crude-consuming country.
Futures climbed as much as 1 percent after the S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011. Crude also climbed as equities rose on better-than-estimated earnings. An Energy Department report tomorrow may show that supplies rose 2.65 million barrels, according to a Bloomberg survey.
“The housing numbers aren’t great but they have improved,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
The actual data is graphed below (after dividing by the CPI to subtract inflation):
About 1 year ago, we wrote a commentary for the American Thinker called House Prices in Free Fall. We predicted that house prices would continue to fall. Specifically:...
Solar activity caused recent extreme weather in USA
Howard Richman, 4/22/2012
If you watch the above April 2, 2012, you-tube video (click here if you can't see it) from Piers Corbyn's www.weatheraction.com, you will find at the 5:30 mark that he correctly predicted March's extreme weather in the USA:
The thirteenth to fifteenth of March, we specifically predicted this in our forecast in detail, we said there would be tornadoes and giant hail in the lower midwest. That happened.
We also said, after that there would be a big heat wave in the central and eastern parts of the USA. That happened.
And then we said that would turn into or change into something more focused on Texas with intense heat in Texas. That happened.
And then, finally, there was a cold blast just coming down from Canada in the Northeast part of America at the end of March carrying into April which we predicted.
Later in the video, Corbyn predicts more tornadoes and other extreme events coming to the American midwest between April 22-24, which precisely coincides with the huge winter storm that is arriving tomorrow, precisely the day he predicted.
He holds that the current extreme weather is due to a certain configuration which appears every 60 years, plus or minus 5 years, causing the same sort of extreme weather each time. He explains:...
Book Review of Joseph E. Stiglitz, Free Fall: America, Free Markets, and the Sinking of the World Economy (NY:W. W. Norton, 2010)
Raymond Richman, 4/19/2012
Beginning with his preface, Prof. Stiglitz, author of a popular textbook for the introductory college course in economics, reveals that he confuses economics and politics. He writes: “Whenever one sees problems as persistent and pervasive as those that have plagued the U.S. financial system, there is only one conclusion to reach: the problems are systemic.”
My own experience is that there are no persistent and pervasive problems. Every economic problem can be solved using the tools of economic analysis. The one that liberal economists consider persistent and like to talk about is the unequal distribution of income. Economists can explain why some households have low incomes and others high incomes, why some countries are poor and others rich, why average incomes have been rising in Communist China, why even the poor in the U.S. have incomes greater than the median income in many countries.
Stiglitz seems to have no idea. Indeed, the title of this book, Free Fall: America, Free Markets, and the Sinking of the World Economy, raises questions about his analytical capacity. The U.S. is not in a free fall, the only U.S. markets that are not free are those that government controls, and the world economy is rising, not sinking. We shall look at what he calls fundamental flaws and, subject to limitation of time and space, analyze his arguments. We shall analyze his solution, restructure the economy and impose world government.
That the Federal Reserve System has occasionally pursued foolish and costly policies cannot be denied. But since the end of the gold standard, it has provided a stable money supply that is modestly inflationary, That such foolishness is inherent in the FRS is deniable. The notion that government or global bureaucrats can do better, to which Stiglitz a former international bureaucrat, subscribes, is baseless. We subscribe to the theory that government policies are at the root of most financial crises including the one that precipitated this Great Recession....
Obama's trade policy will be an issue in the coming election
Howard Richman, 4/18/2012
The failure of President Obama's trade policy is quite clear. For example, according to the latest statistics from the Commerce Department, net US exports of goods to China fell in February for the 25th consecutive month, as compared to the same month one year earlier, as shown in the graph below:
A recent Republican National Committee (RNC) campaign ad (From 'Hope' to Hypocrisy: Excuses, Excuses) points to Obama's manufacturing job losses, without mentioning that his predecessor, Republican President Bush, had just as dismal a record.
Republican candidate Mitt Romney plans to take a tougher line with China than either of his predecessors. In the February 16 Wall Street Journal (How I'll respond to China's Rising Power), he wrote:...
Morici on China's announcement to widen the daily trading range of the yuan
Howard Richman, 4/17/2012
In a commentary in the Boston Herald (Posturing aside, yuan undervalued), U. of Maryland economist Peter Morici pointed out that China's decision to widen the daily trading range of the yuan means little. He wrote:
Beijing announced Sunday it was widening the daily trading range for the yuan to 1 percentage point. This news has been heralded as another indication that China is liberalizing its currency, and the yuan may now be fairly valued.
This may be dead wrong.
In May 2007, when no one would dispute the yuan was undervalued by a wide range — by my reckoning, 40 percent — China widened the trading range to 0.5 from 0.3 percent to no real effect.
Theoretically, if market pressures require, the new band should permit the currency to appreciate or depreciate 1 percent daily, but in the past official intervention has frustrated this process.
As Morici points out, China's interventions in currency markets are the real culprit here, not China's peg to the dollar. China prints yuan to buy hundreds of billions of dollars each year in order to keep the dollar's exchange rate high and the yuan's exchange rate low so that Chinese products can artificially undersell U.S. products in world markets.
Nevertheless, the Obama administration hailed the move as a step in the right direction. The India edition of the Wall Street Journal reported:...
Wasting a Trillion Dollars to "Prevent" Global Warming Is Stifling Economic Recovery
Raymond Richman, 4/12/2012
Last March 29, 2012, the President of the United States told two untruths when he called on the Congress to end taxpayer giveaways to the oil industry and instead to double-down on investments in clean energy industries “that have never been more promising”.
The first untruth is that we have been giving special benefits to the oil industry. That would only be true if one includes the industry’s “social costs”, the costs of pollution from emissions from the burning of fossil fuels, but not if you also include the “social benefits” which environmental extremists always ignore. Indeed, the “social costs” have not been very costly while the “social benefits” have been enormous. The alleged social costs include health effects while the evidence is clear that we are living longer healthier lives. The industrial revolution which raised living standards throughout the world was made possible by plentiful and cheap fossil fuels.
The huge expenditures and costs placed on households and businesses by the government (EPA et al) and so-called clean air laws have had no measurable effect on climate change. Indeed, a growing number of physicists, geologists, archeologists¸ and other climate change scientists reject the “undeniable” anthropogenic or man-made global warming (AGW) theory and argue that natural forces, especially the sun’s magnetic disturbances and their effect on the amount of cosmic rays reaching the earth, are more likely the major cause of climate change. An experiment is under way at CERN, the world’s foremost nuclear laboratory to test that hypothesis. The world is spending trillions of dollars on the basis of unproven AGW theory.
The second untruth is that investments in clean energy industries “have never been more promising.” The truth is that neither wind nor solar will be economical for decades if not a century or more. Neither is reliable and both need to have back-up generating facilities and neither is competitive with nuclear, natural gas, coal, and water power. The President mentioned algae as a source and even the Obama-supporting press laughed at that. All the alternative so-called renewable sources have serious social costs. Wind mills are noisy and are destructive to birds and solar is more expensive and requires huge amounts of acreage. Their growth is limited in any case and both are inherently unreliable. They will always require government subsidies and will never pay their own way. The evidence is clear that so-called renewable energy plants, wind and solar, are unsustainable. The fact is that every wind and solar plant has needed subsidies equal to or greater than half its cost. ...
China posts March trade surplus
Howard Richman, 4/10/2012
The Wall Street Journal headlines the article (China Posts Surprise March Trade Surplus). But it was no surprise to us. In the March 24 American Thinker (Falling Yuan Latest Failure of Obama's Trade Policy), we pointed to scattered news reports that China was stocking up on soybeans, copper and oil in February and argued that China's trade surplus was just due to China building up foreign raw materials inventory a little earlier than usual. We wrote:
The media justifies the Chinese government's decision to bring down the yuan-dollar exchange rate by citing reports that China ran overall trade deficits in January and February. During the first quarter of each recent year, usually in March, the Chinese government encourages its many enterprises to build up their inventories of foreign raw materials. As a result, China occasionally runs monthly trade deficits. The only thing new this year is that the inventory build-up came a bit earlier than usual.
Here is the Wall Street Journal's take on why China ran a "surprise" surplus in March:...
The strange notion that U.S. trade is balanced
Howard Richman, 4/6/2012
In the April 5 Forbes Magazine (The Gold Standard and the Strange Notion of "Balanced Trade"), commentator Nathan Lewis argues that despite the fact that U.S. trade deficits were running at a $631 billion per year rate in January, despite the fact that the U.S. trade deficit with China alone was $282 billion per year in 2011, that there is no such thing as imbalanced trade.
He is correct that imbalanced trade is balanced by flows of savings in the opposite direction. He writes:
In actuality, all trade is balanced. Let’s say you are a businessman or investor. You want to trade something for something else. For example, you want to trade goods, services or assets for money (sell something), or you want to trade money for goods, services or assets (buy something).
Probably you are doing both of these at the same time, so in effect you are trading the things you sell for the things you buy, with the money acting as an intermediary. You probably end the process with roughly the same amount of money that you started. Money itself is an asset, of course.
OK Mr. Businessman, have these trades ever been “imbalanced”? Did you ever give goods and services and get nothing in return? At least not on purpose, right?
If that did occasionally happen, what you have in effect is an obligation for your counterparty to deliver something in the future, which is a type of asset, so even then you receive something in return. This would show up on the Current Assets portion of your balance sheet as an Accounts Receivable or something of that sort.
When trade is out-of-balance, the country exporting more than it imports does get something in return. The 16th century mercantilists got gold in return. The modern mercantilists get iou's, usually interest-paying bonds, in return. In effect, the modern mercantilists are lending money to their victims.
But Lewis shows his complete and utter lack of understanding of modern mercantilism when he sees nothing wrong with this bargain. If he wants to educate himself, we urge him to read our refereed-journal article on the subject (The Scaled Tariff: A Mechanism for Combating Mercantilism and Producing Balanced Trade).
Some economists think that these mercantilist loans benefit the victims. However, any benefit is just short term. At the same time that they give the victims more consumption, they take away investment opportunities in the victims' trading sectors. The result is that the victims get to live beyond their means for a short time, but they lose their industries....
Mexico getting set to impose high tariffs on U.S. chicken legs - final decision by August
Howard Richman, 4/3/2012
According to The Poultry Site, Mexico is getting set to impose tariffs on U.S. chicken legs with the final decision on the tariffs to be made by August. Here is a selection from the story:
Early in 2011, three Mexican poultry companies petitioned the Mexican government to begin an anti-dumping investigation of imports of chicken leg quarters from the United States, frivolously claiming that US companies were exporting leg quarters to Mexico at below-market prices.
The Mexican ministry recently announced its preliminary results; with proposed duties on US poultry ranging from 64 per cent to 129 per cent. Although these duties have not yet been applied, under Mexican law, a final decision will have to be reached by August.
This action is based on the "average cost of production" and assumes that every part of the chicken should be priced the same, e.g., that the chicken feet have the same value as the chicken breast.
Mexico is copying China's tactics for growing its economy at U.S. expense. Referring to China's ludicrous claim that the U.S. is dumping chicken feet on the Chinese market at a price lower than they are sold in the United States, The Poultry Site continues:...
Let 50 different health care flowers bloom!
Howard Richman, 3/28/2012
The U.S. Supreme Court may be about to declare Obamacare to be unconstitutional. This would throw the health care ball back to the states, who can look beyond their borders to find out what works.
Obamacare required much too much in the way of coverage, much too much in the way of "free" care and much to much in the way of mandates. One recently publicized example: It even requires that insurance policies provide free birth control pills to single women attending Catholic universities. The inevitable result: higher premiums, increased government spending, increased business costs, price ceilings, shortages and rationing.
In contrast, some of the states are coming up with economically-sensible plans. Take North Carolina for example. In a class essay, one of my students reported her family's experience moving from New Jersey to North Carolina. She wrote:
I am one of them—those uninsurable children and teenagers who are denied health care insurance due to preexisting conditions. I have severe asthma and am on a long-term asthma controller....
Pres. Obama Appoints Non-Economists to Key Economic Positions
Raymond Richman, 3/25/2012
Pres. Obama’s latest appointment, last week, of a non-economist as head of the World Bank suggests that he disdains economists. Jim Yong Kim, , currently Dartmouth’s president, was formerly the Chair of the Department of Global Health and Social Medicine at Harvard Medical School, and was a co-founder and executive director of Partners in Health. All preceding appointments to head the World Bank were economists.
Pres. Obama’s first Chairman of his Council of Economic Advisers was Prof. Christina Romer, a Professor of Economics at the University of California at Berkeley. Prior to Pres. Obama’s inauguration, Romer worked with Jared Bernstein on the administration's economic stimulus plan for recovery from the 2008 recession. As a Keynesian, it apparently did not matter to Romer what the money would be spent on; it would stimulate the economy.
When she resigned as chair of the CEA to return to academia, she stated in a speech at the National Press Club that more stimulus was needed. She should have said that more ineffective stimulus was needed! (See below.) The first evidence of the non-existence of the Keynesian multiplier was the downturn in the economy between 1936 and 1937 which occurred as soon as the Roosevelt administration reduced expenditures in preparation for the 1936 election. Additional evidence is very recent. When Recovery Act expenditures moderated in 2010, the temporary increase in employment diminished.
The real architect of the Recovery Act of 2009 appears to have been Jared Bernstein who had no economics degree at all....
Falling Yuan Latest Failure of Obama's Trade Policy -- we're published in today's American Thinker
Howard Richman, 3/24/2012
Here's how we begin:
Throughout 2011, at President Obama's urging, the People's Bank of China let the Chinese yuan rise slightly versus the dollar. It didn't raise the yuan enough to bring U.S. Chinese trade toward balance, but at least China was appearing to move in the right direction.
But the rise in the yuan stopped on January 1. Since March 1, China has actually been reducing the price at which the Chinese yuan is exchanged for the American dollar, as shown in the graph below:
Follow the following link to read the rest:
http://www.americanthinker.com/2012/03/falling_yuan_latest_failure_of_obamas_trade_policy.html
Housing, Trade Deficits, and Global Warming Foolishness Caused the Recession: BalanceTrade and the Budget for Recovery
Raymond Richman, 3/11/2012
Notwithstanding that the recesion of 1937-38 indicated that there was no Keynesian multiplier--as soon as the stimulus of the preceding four years was reduced, the economy tanked--Keynesians maintained that the Roosevelt administration reduced its stimulus spending too soon. The same agument is being made by Nobel prize winner Prof. Paul Krugman and former Chairman of the Council of Economic Advisers, Prof. Christina Romer, and many others after the failure of the $800 billion Recovery Act of 2009.
Keynes was a great English economist who sought a solution to the problem of depressions and business cycles in general. He thought he found the answer and wrote his epic, the General Theory of Employment, Interest, and Money (1936) . While Keynes took a scientific approach to the problem of recovering from a depression, he turned out to be wrong about his “multiplier”; increased government spending creates employment temporarily but the jobs disappear when the stimulus is ended.
Dr. Valerie Ramey, Professor of Economics at the University of California, San Diego recently published in the NBER Working Paper Series the results of her research entitled “Government Spending and Private Activity” in which she concluded that “For the most part, it appears that a rise in government spending does not stimulate private spending; most estimates suggest that it significantly lowers private spending. .. The results imply a multiplier on total GDP of around 0.5.” And further, “For all but one specification, though, it appears that all of the employment increase is from an increase in government employment, not private employment.” ...
The Historical Background of Purim
Howard Richman, 3/8/2012
[Note: I posted an earlier version of this commentary on March 8, 2011.]
For thousands of years people have been inspired by Esther's brave choice when she risked her safety in the king's harem to save the Jewish people from annihilation. Her cousin Mordecai had called her to greatness when he asked her, “Who knoweth whether thou art not come to royal estate for such a time as this?” (Esther 4: 14). She had bravely replied to Mordecai:
Go gather together all the Jews that are present in Shushan, and fast ye for me, and neither eat nor drink three days, night or day; I also and my maidens will fast in like manner; and so shall I go in unto the king; which is not according to the law; and if I perish, I perish. (Esther 4: 16)
Some think that the Book of Esther is fiction. But I do not. It fits too well with what we know about Persian history. Even though the Persian libraries were destroyed by Alexander the Great and the Greek reports conflict wildly, the Jewish account of Persian history is quite consistent. Esther is part of a chain of historic Jewish figures (Mordecai, Esther, Ezra and Nehemiah) who worked together to save the Jewish people at a time of extreme peril. The following timeline shows how Persian and Jewish history fit together:
Each Jewish event is dated as having taken place during such-and-such year of the reign of such-and-such monarch, so the reigns of the Persian monarchs give us the approximate year of each major Jewish event. On the timeline, the Jewish events are shown above the horizontal axis, while the Persian monarchs are shown below....
Dems and Republicans Should Get the Tax Treatment of Capital Gains Right
Raymond Richman, 3/6/2012
Republicans and Democrats in the House of Representatives and the Senate have little understanding of the nature of capital gains and losses and their appropriate treatment in a system that imposes a progressive individual income tax and a corporate income tax and in which proprietorships, partnerships and corporations are subject to different tax treatments. Republicans advocate zero tax on capital gains and believe that corporate dividends are subject to double taxation, once by the corporation and again by the personal income tax. They believe this justifies a zero tax on capital gains and little or no tax on dividends under the personal income tax. Here is a look at the current treatment of capital gains and what we recommend as the appropriate tax treatment.
From 2008 – 2012, long-term capital gains on assets held more than one year were taxed at a zero rate in 10 and 15% income brackets. Those in the 25-35% income tax brackets were taxed at 15%. Short-term capital gains (on assets held less than one year), were taxable at ordinary rates. Democrats argue for higher rates. The president proposed for 2013 a long-term rate of 10% instead of a zero rate in the two lowest income tax brackets and a 20% rate in the higher brackets. Capital losses offset capital gains and are limited to a deduction $3000. Republicans usually argue for a zero rate on capital gains.What is the appropriate treatment? ...
Is Nuclear Energy Safe after Fukushima? by Michael Natelson
Howard Richman, 3/3/2012
[Note from Howard: We just published a new working paper by Dr. Michael Natelson. Michael is a retired nuclear scientist from Westinghouse Corporation and a member of the Board of Directors of Ideal Taxes Association. Here is how it begins.]
“In the beginning” there was Einstein’s land mark 1905 paper on Special Relativity. He was primarily concerned with putting the laws of electricity and magnetism on the same bases as the laws of mechanics. They should be the same in all inertial frames of reference. (In an inertial reference frame an object at rest stays at rest, and an object moving with at constant velocity maintains that velocity.) Einstein succeeded making use of the assertion (resulting from the Michelson-Morley experiments (1887)) that the speed of light c (300 million meters/second in vacuum) is the same in all inertial reference frames. The key result in Einstein’s paper relative to “Nuclear Energy” is E=Mc2 , the most widely known equation to the educated public. To see how it applies to energy release it is better written as DE=DMc2 , the change in kinetic energy of participants in an inelastic collision (as apposed to an elastic (billiard ball) collision) is equal to the change in mass of the participants times the speed of light squared. Given the magnitude of the speed of light, it is easy to imagine a collision that resulted in a modest loss of mass would yield a huge increase in kinetic energy of the final constituents. When Einstein published his papers on this result no such collision (reaction) had been identified, but this did not inhibit people from imagining such a reaction and its possible consequences.
In early 1914, H. G. Wells published his novel The World Set Free. He wrote that in1932 we would discover a means of controlling the rate of radioactive decay of heavy elements, thus releasing large quantities of “atomic energy”. This abundant, and cheep, new energy source would revolutionize the world economy. Not all for the good, massive unemployment of manual laborers would result. Also, “atomic bombs” could be constructed, and with economic/social unrest a cataclysmic “atomic” world war between nation states would take place in the 1950s. As a result of this terrible war, Wells envisioned that the surviving leaders would see that a world governing process was an absolute necessity for mankind’s survival, and that wars between nation state having these weapons would be an anathema.
All Wells’ predictions are not right on the money, but in the large they are remarkable. Einstein’s “equation” did lead to an abundant (if not “cheap) new energy source. And, this “energy source” could yield terrible weapons, which having been used in war once, has lead to some international institutions devoted to world peace and controlling these weapons. Wars between nation states having these weapons have been avoided. One could assume, as I believe Wells would, that this is because of mutual recognition of the horrible consequences of their use (by design or accident).
It is a remarkable coincidence that Wells chose 1932 for the breakthrough development of the mechanism of “atomic” energy release. For in fact James Chadwick discovered the neutron in1932. In 1911 Chadwick’s mentor and colleague Ernest Rutherford had determined that most of the mass of atoms was concentrated in a compact positively charged nucleus surrounded by a cloud of much smaller negatively charged electrons. The make up of the nucleus was not initially understood, which is easily seen by noting that: The lightest atom (element), hydrogen, has one electron. It’s positively charged nucleus is called a proton. The next lightest atom, helium, has two electrons. But it’s nucleus, with twice the positive charge of a proton, has approximately four times the mass of a proton. Chadwick’s neutron has no charge and is slightly more massive than the proton. With a short range, attractive force it can be part of an atomic nucleus, aiding in holding the protons together (At distances larger than the diameter of an atomic nucleus positively charged protons repel, but like the neutron at small distances they also exert an attractive force.). Thus, in the above example, the helium nucleus (referred to as an alpha particle) has two protons and two neutrons.
Now why is the discovery of the neutron the “breakthrough development”? The Hungarian physicist and friend of Einstein, Leo Szilard first saw the answer to this question. A neutral, uncharged, neutron should be able to readily penetrate a nucleus in an inelastic collision, cause the nucleus to split, fission, with a loss of mass and a release of much energy and possibly additional neutrons so as to cause more fissions, i.e. to initiate a chain reaction. Even though fission had not been observed in the early thirties, Szilard prepared a patent based on this idea for a nuclear reactor and assigned it the British government in 1936. (Rutherford had speculated about an energy liberating fission reaction, but with knowledge of only positively charged protons and alpha particles as initiators, he thought these particles would need so much kinetic energy to penetrate a positively charged nucleus that the net energy release would not be of practical use.)
With the discovery of the neutron, the Italian physicist Enrico Fermi began experiments bombarding naturally occurring heavy elements (e.g. Uranium) with neutrons to produce new heavy (transuranic) elements. He received a Nobel prize for this work in 1938. However, the German chemists Hahn and Strassman determined that Fermi had produced lighter elements. Hahn’s long time associate Lisa Meitner and her nephew Otto Frish identified Fermi’s process as fission, and reconciled it with a physics model of a heavy element nucleus absorbing a neutron and becoming unstable, splitting into high kinetic energy lighter elements (fission products), additional neutrons (2 or 3) , high energy electromagnetic radiation (gamma rays) and electrons/anti-electrons (beta particles)....
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