Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Bubbles are popping - a recession is coming!
An economic bubble occurs when people have been bidding up something because they think that the price will keep going up. Once the price starts heading down, it goes down fast. There have been several famous bubbles in history including:
1. The Tulip Bubble
2. The South See Company Bubble
3. The U.S. House Price Bubble
David Stockman, former budget director under President Reagan, writes (Bubbles Don't Correct, They Burst):...
How Trump could get the Economy Going -- we were published in the American Thinker this morning
Read the rest at:
GM and the Balance of Trade -- Ray was published in the American Thinker on Monday
Here's a selection:
Click here to read it.
An Economist's Plan to Increase Economic Growth And Create Jobs
Mortimer Zuckerman, Chairman and Editor-in-Chief of U.S. News and World Report asked in an opinion piece in the Wall St. Journal, 8/21/2015, “Who Will Get the Dreary Economy Going?” We face another recession on the horizon, he says. “Yet there is little urgency from the White House these days regarding the economy. And what is the focus of the current presidential candidates and the media covering them?” They are focused on Hillary’s email, on illegal immigration and immigration reform, overturning the Affordable Care Act, and a wide number of domestic issues none of which have anything to do with economic growth or increasing employment. Little has been accomplished since 2009. Millions are employed part time, millions have left the labor force and given up on finding a job. “..(W)hat we need is a public discussion of where, precisely, America is headed economically.”
The rest of this article is an attempt to show how economic growth can be stimulated, good jobs can be created, prosperity regained, and, as Donald Trump claims, America can be great again. This is what he and the other candidates can pledge to accomplish.
"Free trade" Is Not supported By Economic Treory. Balanced Trade Is.
General Motors is planning to import cars from China, Ford is planning to import cars from Mexico. What’s the beef? Mercedes, Volkswagens, and BMWs are being imported from Germany, Toyota and Nissan are being imported from Japan, Hyundai, Samsung, and Kia are being imported from Korea, Fiat, Maserati, and Lamborghini from Italy, Renault and Citroen from France. Why shouldn’t GM and Ford import autos they make abroad?
The problem is not with importing foreign cars. It is the fact that we have huge trade deficits with China, Germany, and Japan, trade deficits with Korea and Mexico. China, Germany and Japan sell to us but do not buy enough from us, resulting in huge trade deficits for the U.S.. Apple produces its major products in China and has closed its factories in the U.S. So has Hewlett-Packard and dozens of other American companies. Nothing wrong with that so long as the countries in which they produce their products buy as much from us as we import from them. The five countries mentioned above do not.
The problem can be easily dealt with without violating the rules of international trade. ...
Fed Official Says Fed's Quantitative Easing Policy Failed to Achieve Any of Its Recovery Objectives
Jeff Cox of CNBCcom reports that the Federal Reserve is putting some of its post-crisis actions under a magnifying glass and not liking everything it sees. Stephen D. Williamson, vice president of the St. Louis Fed, finds fault with three key policy tenets. Cox writes:
”Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite. And he believes the "forward guidance" the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors. Finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank's balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements.”
“Williamson is quick to acknowledge that then-Chairman Ben Bernanke's Fed, through liquidity programs like the Term Auction Facility that injected cash into banks, "helped to assure that the Fed's Great Depression errors were not repeated."
"There is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed—inflation and real economic activity. Indeed, casual evidence suggests that QE has been ineffective in increasing inflation," Williamson wrote.
We all know that wages have not benefitted at all under the Fed’s policies and that the economy’s growth has been less that 2% per year and the growth in GNP for the 2nd quarter of 2015 is projected to be 1½ percent of less. We appear to be on the verge of another recession. ...
Property Taxes as a Percentage of Value by State
The Tax Foundation posted a cool info-graphic on their blog showing variation in property tax rates by state.
One of the striking things about this graphic is the extent of variation in property tax rates, with some states imposing property tax rates that are on average several times as large as those imposed by other states.
Globalization Has Been a Disaster for U.S. Manufacturing and U.S. Workers
It is time to end the globalization foolishness begun by Pres. Woodrow Wilson and executed by Pres. Franklin Roosevelt. The former created the League of Nations and the latter, the United Nations, a much more serous subversive entity. Globalization has reduced the United States from its status as the world’s leading creditor to the world’s leading debtor, reduced its status as the world’s leading manufacturer to second place to China, cost the US millions of manufacturing jobs, caused the loss of millions of American jobs, and caused real wages of American workers to stagnate. The latest trade statistics show that the trade deficit in July was $43.8 billion but the details are even worse for American workers. The trade deficit on goods was $63 billion, an annual equivalent of about 6 million manufacturing jobs. The burden borne by US workers who lost their jobs can be conservatively estimated at $300 billion.
We’ve created huge international bureaucracies that are expensive to the American taxpayer and what they do that is worth doing can be done by agencies of the US government at much lower cost. Here is how much some of them cost us:
In 2012, the US contributed $7.5 billion direct to international organizations. This does not include the Department of State’s own Agency for International Development. The principal beneficiary was the UN which received $637 million in support of the UN itself plus an additional $75 million to UN’s Capital Master Plan or 22% of the cost of administering the UN, plus contributions to dozens of UN entities. This does not include the dozens of UN programs, some of which are listed below. Where possible, the list includes the principal contributions of the US to all international agencies and in some cases the proportion of the budget of the organization financed by the US contribution. Where no percentage appears, one can assume that all or nearly all of the cost is borne by the U.S. ...
Gloabalization Has Been a Disaster for the U.S., Especially American Manufacturing Workers
It is time to end the globalization foolishness begun by an academic, Pres. Woodrow Wilson and executed by an effete politician, Pres. Franklin Roosevelt. The former created the League of Nations and the latter, the United Nations, a much more serous subversive entity. Globalization has reduced the United States from its status as the world’s leading creditor to the world’s leading debtor, reduced its status as the world’s leading manufacturer to second place to China, cost the US millions of manufacturing jobs, caused the loss of millions of American jobs, and caused real wages of American workers to stagnate. The latest trade statistics show that the trade deficit in July was $43.8 billion but the details are even worse for American workers. The trade deficit on goods was $63 billion, an annual equivalent of about 6 million manufacturing jobs. The burden borne by US workers who lost their jobs can be conservatively estimated at $300 billion.
We’ve created huge international bureaucracies that are expensive to the American taxpayer and what they do that is worth doing can be done by agencies of the US government at much lower cost. Here is how much some of them cost us.
UN programs, some of which are listed below. Where possible, the list includes some the principal contributions of the US to all international agencies and in some cases the proportion of the budget of the organization financed by the US contribution. ...
Nothing shows the incompetence of the Republican rank and file in Congress than their opposition to the Ex-Im Bank on purely ideological grounds. The Ex-Im Bank is an independent government agency that finances the purchase by foreign companies of American products. The Ex-Im Bank does not cost the American taxpayers a dime. Not a word of complaint against the World Bank, an international socialist bank that lends money to foreign businesses and governments to finance foolish global warming projects and costs American taxpayers billions of dollars. Not a word against the waste of billions of dollars supporting the U.N., a basically anti-American world government. No proposal to eliminate US Department of Education or the US Department of Housing and Urban Housing and ousing andHHDevelopment, or to reduce the subsidies to wind and solar plants, luxury hybrid electric autos, businesses that invest in solar panels, etc., etc. Education and urban housing are state and local responsibilities under the US Constitution and both departments have abysmal records of accomplishment. And taxpayers are forced to pay higher electric prices because utilities are required to overpay for wind and solar energy. but none of this comes in for criticism from Republican from the Republican candidates.
The Ex-Im bank states that by financing the export of American goods and services, it has supported 1.3 million private-sector, American jobs since 2009, supporting 164,000 jobs in FY 2014 alone. There is no reason to question its claim.
Here in Pittsburgh, PNC Bank has been using the Ex-Im Bank to ensure some of its loans to foreign importers of American goods from its American clients, supporting American jobs.
Nothing shows the incompetence of the Republican candidates for president all of whom pledge to reduce the size of the federal government. What federal expenditures would they cut? They offer no specifics. As for increasing private employment, only Donald Trump offered a specific proposal, balanced trade instead of free trade which has produced mushrooming trade deficits costing millions of private jobs.
Isn’t it time for the presidential candidates to indicate their priorities, what federal expenditures they propose to cut. ...
Journal of Economic Literature:
Atlantic Economic Journal: