Another great video from Adam Smith Institute:
Politicians are politicians.
Video: The Morality of Taxation
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Category Archives: economy
Video sharing will be the next big thing according to MIT Tech Review
Via MIT Tech Review:
Ever since Facebook announced its $1 billion acquisition of the company behind the popular photo-sharing app Instagram last month, the question on every nerd’s lips has been: What will be the next big thing in mobile apps?
For many, the answer is video. Apps like Viddy and Socialcam have picked up steam, gaining users—including pop stars Justin Bieber and Britney Spears—who are shooting and sharing videos with others within the apps and on social networks. Like Instagram, many of these apps also include a number of effects you can use to give your videos an edge, such as filters and background music.
Could be.
However, this is from the same MIT, who’s Economics Department that foisted Ph. D. Paul Krugman upon the world. And, it goes without saying, any institution giving Paul Krugman a degree, of any kind, will do serious damage to your reputation.
A mistake like that is difficult to overcome.
Plus, having Ben Bernanke and Christina Romer on MIT Economics Department alumni roster is not going to help repair their reputation either.
The Freakonomics Guys (And Mark Cuban) Are Catching Up to MCT on College Tuition
It’s just a matter of time until we see the same meltdown in traditional college education. Like the real estate industry, prices will rise until the market revolts. Then it will be too late. Students will stop taking out the loans traditional Universities expect them to. And when they do tuition will come down. And when prices come down Universities will have to cut costs beyond what they are able to. They will have so many legacy costs, from tenured professors to construction projects to research they will be saddled with legacy costs and debt in much the same way the newspaper industry was. Which will all lead to a de-levering and a de-stabilization of the University system as we know it.
Its like they are reading my mind… Or web page. Via MCT (1/15/12):
One way to drive down the cost of college tuition is getting the government out of the business of student loans. Every time government becomes involved in an economic activity, it becomes more expensive. If government student loans are severely limited and Universities see fewer students attending their hallowed halls of higher learning, cost of tuition will drop in a hurry.
Otherwise, tuition will keep climbing and people like Mary Sue Coleman will continue laughing all the way to the bank.
Glad to see the Freakonomics guys catching up to MCT.
Michigan taxpayers overcharged $300 million; state rushing to spend the money
Yep, here in Michigan we are overtaxed.
Total state tax revenues are up by nearly $300 million since they were last estimated by state officials in January, according to consensus estimates agreed upon Wednesday by state economists and Treasurer Andy Dillon.
The increase over January projections is due to greater-than-expected sales and business taxes, combined with a decrease in cash assistance and Medicaid caseloads reported by the state departments of human services and community health.
Revenue into the School Aid Fund declined 3.3 percent to $10.87 billion, while the general fund grew by 0.6 percent to $19.94 billion in fiscal year 2011-12. The total growth in School Aid and General Fund revenue was $9.06 billion, or 2.6 percent.
Growth is School Aid and General Fund revenue is expected to dip by 1 percent in the fiscal year that starts Oct. 1, though combined School Aid and General Fund revenues will increase by 1 percent to $20.13 billion.
Gov. Rick Snyder will seek to spend the additional money on one-time expenses due to the temporary nature of the extra funds, state Budget Director John Nixon said after the estimates were announced.
“It’s not like we’ve got a windfall today,” Nixon said.
The state of Michigan overtaxed its residents by over $300 million and, rather than devise a plan to return the money to the people through a tax cut next year (helping the state economy in the process), Michigan’s governor is planning to burn through Michigan taxpayers money.
But don’t worry, our governor and his crew will spend our money on “one-time” expenses.
Medicare, Medicaid and USPS losses are orders of magnitude larger than JP Morgan Chase
JP Morgan Chase lost nearly $2 billion on bad investments. Like clockwork, Washington politicians began their grandstanding, calling for additional regulations. Michigan’s very own Democrat Senator, Carl Levin is leading the charge.
The language of the Dodd-Frank law clearly intended to prohibit a bank from engaging in the kind of overly broad hedging at play in J.P. Morgan’s loss, Democratic Sens. Carl Levin of Michigan and Jeff Merkley of Oregon, said in a conference call with reporters on Friday. Merkley and Levin wrote the provision of Dodd-Frank that implemented the Volcker Rule, aimed at stopping traditional banks from conducting proprietary trading.
A draft proposal of the Volcker rule permitting overly broad hedging bets should be tightened, they said.
Democrat Tom Harkin is going a step further, calling for the break up of JP Morgan Chase.
“Last night’s announcement is a sign that large financial institutions continue to pose significant risk to the economy,” Sen. Tom Harkin (D., Iowa) said in a statement to Dow Jones Newswires on Friday. “These ‘too-big-to-fail’ banks need to be broken up because of their inherent risk.”
Because destroying one bank is not enough, avowed Socialist Bernie Sanders calls for the break up of America’s six largest banks.
Sen. Bernie Sanders (I., Vt.) also said in a statement Friday that the country’s six largest banks, including J.P. Morgan, should be broken up to prevent the need for any future taxpayer bailouts.
While politicians point and grandstand about one large loss at a major U.S. bank, our intrepid Senators are overseeing chronic losses several orders of magnitude larger than JP Morgan Chase.
If you want to know why these are market successes, consider: Medicare and Medicaid lose at least 35 times as much per year to fraud and other improper payments, and Medicare wastes even more on medical care that does nothing to make patients healthier or happier. This happens year after year after year.
Now ask yourself: when was the last time someone got fired over those losses? And yet the politicians’ first reaction to the J.P. Morgan trade was greater oversight by the political system, which tolerates much greater losses than the market system that is currently disciplining J.P. Morgan.
And even the USPS loses more in one quarter than JP Morgan Chase did in their headline grabbing loss.
JPMorgan Chase’s $2 billion trading loss is top news nationwide. But over at the U.S. Postal Service (USPS), such losses are business as usual. USPS reported a typical (for it) $3.2 billion loss for the most recent quarter. Try that comparison on for size.
JPMorgan Chase incurred a “whale” of a loss because, as explained by the bank’s CEO Jamie Dimon to his investors, this is an example of a “flawed, complex, poorly reviewed, poorly executed and poorly monitored” betting strategy. Despite the loss, it by no means spells doom for the bank. The bank has more than enough capital to stomach these losses, as painful as they are. JPMorgan Chase’s actions led to the loss, and JPMorgan Chase’s actions will fix it. You can bet it is already doing just that.
With their less than stellar record, Washington politicians have no business meddling in the private sector.
Africa experiencing economic growth and improvement in child mortality rates
Via my favorite economics writer, Tim Worstall:
That is the annual change in child mortality in those selected countries. No country, no group of countries, has ever seen anything like this, it simply has not happened so quickly anywhere else at all. Something, blessedly, is going very right indeed in this world. My suggestion is that we keep doing exactly what it is that we are currently doing: we might call it globalisation, foreign direct investment, openness to trade or as Madsen puts it, buying things made by poor people in poor countries. But it’s working, isn’t it?
The left says free markets and capitalism are evil. However, investment and engaging in trade with Africa by “the rich” has led to economic growth. And, with economic growth, peoples lives improve indicated by the improvement child mortality rates.
Of course, the #OWS crazies and Democrats (aren’t they really the same) would rather engage in demagoguery rather than face, you know, actual data.
History doesn’t repeat itself but it does rhyme: Eurozone vs. Japan
Today’s Eurozone looks remarkably like Japan of the 1990′s.
Via The Big Picture:
As Mark Twain reportedly quipped: “History doesn’t repeat itself but it does rhyme.” ECB economists, in their analysis of the Japanese experience in the central bank’s monthly bulletin for May, published yesterday, wrote: “As banks struggled with bad debt for years, they curtailed lending to new firms, which led to distortions in the allocation of credit and ultimately exacerbated the financial crisis and postponed a sustainable recovery.” That description would fit the euro-area situation if the words “bad debt” were replaced with “raising capital”.
European policy makers have failed to implement some of the reforms that also proved elusive in Japan. The staff economists stated: “The strong emphasis traditionally placed on job security in Japan may have reduced flexibility by hampering sectoral adjustments in the economy.” This time, only one word needs to be changed to describe the euro area. That is “Japan”.
The American left idolizes Europe and want’s to recreate this mess here.
Google asserts search engines have free speech rights in choosing links to present users
According to the report authored by UCLA law professor Eugene Volokh: “Google, Microsoft’s Bing, Yahoo! Search and other search engine companies are rightly seen as media enterprises, much as the New York Times Company or CNN are media enterprises” and deserve the same protections. It adds that search engines have the same freedom to choose a set of links as do news aggregators like the Drudge Report or the Huffington Post.
Search engine results are a form of opinion, says the report, in which companies offer information they think is most relevant to users.
In practice, this would mean Google has the right to punt sites like Yelp, which has complained that Google is a monopolist, to the search equivalent of Siberia if it decided that was best for users (Yelp now comes up second in a search for “restaurant review”).
The US has a long history of companies claiming First Amendment protections. One example is a newspaper that was allowed to exclude certain advertisers even though it had a “substantial monopoly.”
If search engines such as Google begin choosing what links are presented, as do news aggregators like the Drudge Report, then they are no better than the old Yahoo! sites.
Flop: Citizens of Allen Park, Michigan asked to foot bill for failed film studio
Ahh… April 14th, 2009 seems like yesterday:
Governor Jennifer M. Granholm today announced that Michigan’s aggressive film production attraction efforts have helped land Burbank, California-based Unity Studios to launch a $146-million state-of-the-art production studio in Allen Park. The project is expected to initially create up to 121 new jobs, including 83 directly by the company. At full operation, Unity Studios, factoring in related business and film and television productions, expects to employ up to 3,000.
“We are working hard to build a diversified economy and create good-paying jobs for our talented workforce,” Granholm said. “As a result of our aggressive film incentives enacted just a year ago, we are not only bringing new investment to the burgeoning film production community in Michigan, we are putting in place the infrastructure for an industry that will support long-term job growth and opportunity in new, creative sectors.”
Allen Park City Manager John Zech says if a tax increase isn’t approved by voters today, the city will likely have to get an emergency manager.
Zech says a 4-mill, 2-year tax increase to pay for $28 million it borrowed to buy land for a failed movie studio is much needed. The city also borrowed $2 million against next year’s tax revenue and is asking for another $2 million from the state of Michigan in an emergency loan, Zech said.
Not like anyone could see this coming.
The Brilliant Milton Friedman vs. Detroit’s Clueless 99% Protest Group
The group is demanding that DTE and others like it do more to help the 99%, especially in the city of Detroit. Reverend Charles Williams II was among those demonstrators outside the headquarters. He said they want the company to take the millions that they got in tax breaks from the state the federal government and give some of that back to the city of Detroit and its residents.
The demonstrators tried but were turned away from getting inside the shareholder meeting and then spilled out onto the street. Other demonstrators claim DTE is not paying it’s fair share of taxes and it’s time that changed. The protestors also called for a moratorium on shut-offs for those who have not paid their bills.
Detroit has a bad image, and protesters trying to overrun a shareholder meeting only reinforce this image.
Of course, no one protesting has bothered to stop and think where companies such as DTE get the money to PAY taxes in the first place.
They need to spend a little time watching Milton Friedman.
Besides, having government redistribute the wealth isn’t a good idea.