So, I've been listening to Barack Obama giving speech after speech on how he is going to make America better. First let me say that this man is such a good speaker that I really want to believe in what he is saying. He says many wonderful things: health care for everybody, taxing the really rich, fair wages for women (it is debatable if women are really that under paid), and less dependence on foreign oil. Sadly, the cold-hearted analyst in me prevents me from failing for this comforting rhetoric.
First I will take on the two ideas of healthcare and women’s fair wages. The burden for both of these initiatives will fall on the employer. Both of these initiatives will result in a greater cost of employment, or in effect, raise the price floor on labor. As this graph from a previous post shows:
when a price floor is above the demand-supply equilibrium, consumption of the good, labor in this case, goes down. Now, should women be paid less for being women? No. Should there be remedies for such bigotry? Yes. However; the study that everyone quotes, the American Association of University Women, shows that, controlling for all other factors, that women near what the men make, and the situation is getting better for every new generation of women. Healthcare is a whopper in which no one, my self included, seems to have a good answer on. Senator Obama’s plan is bold and expensive. There has to be an equilibrium where the trade off in getting people the basic human need of healthcare provided is balanced against the health of the economy. I don’t think Senator Obama’s plan is thoughtful enough of the equilibrium.
On taxing the rich, I think Obama might be half right. I think that income taxes can be raised on people who make more than $250,000; especially if there are more and more opportunities for people to make that much. However; I think he needs to pull his heard out of his rear-end and understand that he can lower other taxes to grow the economy. He needs to leave the capital gains tax at 15%, and lower the corporate taxes to 15% also. When the capital gains taxes were lowered to 15% there was an explosion of capital gains activity; because, unlike income, recognizing of capital gains can be timed to favorable conditions. Lowering the corporate tax rate will increase formation of new, and growth of old corporations by the fact of making it easier for companies to earn a return. By lowering the threshold for a business to be profitable, more people will start more companies. More companies means more people making money, more people paying taxes, more people getting health insurance, more welfare recipients becoming self-supporting wage earners, and a host of other social benefits. That is where I have a fundamental disagreement with Barack Obama. I believe in growing the economy is best way to get out of the current mess.
The second thing on my mind is this. How weird it would be to have a radio controlled valve that could allow you to choose to shoot blanks or live rounds. My only fear is that the neighbor might get a new garage opener, and poof, a baby is on the way.
Later,
B
First I will take on the two ideas of healthcare and women’s fair wages. The burden for both of these initiatives will fall on the employer. Both of these initiatives will result in a greater cost of employment, or in effect, raise the price floor on labor. As this graph from a previous post shows:
when a price floor is above the demand-supply equilibrium, consumption of the good, labor in this case, goes down. Now, should women be paid less for being women? No. Should there be remedies for such bigotry? Yes. However; the study that everyone quotes, the American Association of University Women, shows that, controlling for all other factors, that women near what the men make, and the situation is getting better for every new generation of women. Healthcare is a whopper in which no one, my self included, seems to have a good answer on. Senator Obama’s plan is bold and expensive. There has to be an equilibrium where the trade off in getting people the basic human need of healthcare provided is balanced against the health of the economy. I don’t think Senator Obama’s plan is thoughtful enough of the equilibrium.On taxing the rich, I think Obama might be half right. I think that income taxes can be raised on people who make more than $250,000; especially if there are more and more opportunities for people to make that much. However; I think he needs to pull his heard out of his rear-end and understand that he can lower other taxes to grow the economy. He needs to leave the capital gains tax at 15%, and lower the corporate taxes to 15% also. When the capital gains taxes were lowered to 15% there was an explosion of capital gains activity; because, unlike income, recognizing of capital gains can be timed to favorable conditions. Lowering the corporate tax rate will increase formation of new, and growth of old corporations by the fact of making it easier for companies to earn a return. By lowering the threshold for a business to be profitable, more people will start more companies. More companies means more people making money, more people paying taxes, more people getting health insurance, more welfare recipients becoming self-supporting wage earners, and a host of other social benefits. That is where I have a fundamental disagreement with Barack Obama. I believe in growing the economy is best way to get out of the current mess.
The second thing on my mind is this. How weird it would be to have a radio controlled valve that could allow you to choose to shoot blanks or live rounds. My only fear is that the neighbor might get a new garage opener, and poof, a baby is on the way.
Later,
B
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