Home » Money (Page 14)

Category Archives: Money

Economics and commerce, all built from scratch.

Trade War – or Trade Tantrum?

Posted on by | 11 Comments

President Trump is threatening a trade war with Europe. “I’ve had a lot of problems with the European Union, and it may morph into something very big from … a trade standpoint,” Trump said in an interview with British ITV on Sunday. “It’s a very unfair situation, we cannot get our product in. It’s very, very tough, and yet they send their product to us — no taxes, very little taxes.”

Yes, trade in goods and services with Europe is not precisely balanced. But why? Is it because it’s so hard to get products in, and they have a tax advantage? Wasn’t that supposedly taken care of in the recent tax bill?

Like most of what Trump says, the statement is not only wrong, but completely misses the difficult underlying reason why US trade will never be in balance. It’s a major feature of the power we wield around the world through the greatest strength we have – the US Dollar. And messing it up may make us lose far more than we think to in the destruction of a “war.”

Continue reading →

Taxing Times

Posted on by | 6 Comments

If you believe that tax cuts create jobs and growth, you’re not alone. Almost, but not quite. Even those who would benefit the most from the proposed tax bill aren’t willing to go that far.

This puts the Republicans in the Senate in a terrible bind. They can pass the tax bill which came over from the House, potentially angering their constituents, or they can stop it, angering their donors. They also have the choice between raising the deficit or having a record of getting just about nothing accomplished.

How bad is it for Republicans, already worried about 2018? It’s so bad it’s worse than the Tax Bill itself.

Continue reading →

Global System to the Test

Posted on by | 2 Comments

It’s become popular in the politics of many nations to re-think free trade and globalism. Many people believe that something has gone terribly wrong and, for many reasons, politicians typically point to foreigners or a faceless “global order” as the problem.

This belief is not limited to the US by any means. It ranges from a sense of discomfort to a belief in “fair trade, not free trade” to outright sneering at “globalists”. Is there something wrong in the global order?

The short answer is yes, but the long answer is incredibly long and, interestingly enough, green on the back.

Continue reading →

Target the Future

Posted on by | 1 Comment

Target stores are raising their employees’ minimum wages to $11 per hour immediately, with a pledge to hit $15 per hour by 2020.

This may seem like a victory for the Democratic platform to raise all workers’ pay to a livable wage, and in many ways it is. But it’s also an important victory for the free market, which is proving that the cyclical depression of workers wages was indeed a temporary, demographically driven problem which will be overcome. It just takes a tremendous amount of time – really a full generation.  More importantly, it shows the direction of retail and possibly the service industry as a whole does have a future as an important part of a dynamic economy. Continue reading →

E-Z Reform

Posted on by | 4 Comments

Republicans need to produce tax reform, but can’t agree on much.  Here is a post from two years ago which outlines an easy way to make something happen and claim victory.  It may even be good policy.

Tax reform is on the minds of many Republican candidates, and that’s a good thing. Donald Trump revealed a plan, suggesting he may be a serious candidate after all. This announcement came as his poll numbers were slipping, so we may have a hint what voters think about actual policies. Jeb Bush released his plan earlier this month with the distinction of being called “weird”.

The point is that we are talking about taxes and serious tax reform, which is good. No one should expect one plan to suddenly spring forward and cut through the elaborate mess we have. Then again, once the knife is out, you could carve a better tax code out of a banana. But what really is needed? What is “simplification” or “reform”? Let’s start at the beginning.

Continue reading →