Monday, August 16, 2010

What can you say?

I am identical in tune with Bruce Bartlett about both the Laffer Curve and the Republican party. My calculation is that the Laffer Curve is accurate only when and if the Tax rate is between 47 and 50%. Anything less than 47% produces no discernable effect, and anything over 50% fairly well stabilizes into a straight line–just bad. Bruce and I are in agreement in keeping the Tax rates below 50%–in my case 47%. I know positively that Bill Buckley would not have Glenn Beck in the house of Conservatives–he reminds of Das Spiegel of the 1930s. The Tea Party Movement is a Fox Channel manufacture, and more noise than fact. I wish I could be a Conservative without being Red of Face.

One can question what economic policies can actually accomplish, but here is a list of links. Some of these ideas have worked very well, some not quite so well. How well they will work elsewhere is always a doubt for policy analysts. The real importance comes in the knowledge that there are alternatives which can be tried, even after the traditional American set of economic policy options have failed. I myself suggest that the natural Keynesian model failed in the face of greater Employment and added national debt. I would see an actual Tax increase across the board, thinking this would provide greater stimulus than Stimulus. I will not bring forth any rationale for the above at this time, as it is a Post about economic policy options.

Arnold Kling tries to define the use of the term ‘momentum’ in relationship to Employment, but actually explains Why raising Employment levels constitute such difficulty. Sectors flare and contract due to Market flows, producing much higher alteration of Employment statistics than their importance within the economy would dictate. A translation into common English could state that sectors can reduce half its employed labor force, while only contracting their production by 20% or less. Business managers almost never Hire without expectation of expansion, with the commitment to expanding Production. They simply tend to over-Hire, though they can withstand this labor oversupply under high Consumer Demand. The flipside to the Equation consists of a tendency to vastly over-Layoff to sustain Profitability under decline. This Yo-Yo effect produces most of the momentum in Employment, and means little to the overall Employment picture. lgl

No comments: