Economics - Suburban Republican Women's Club

The Free Market and Economics

Dr. Walter E Williams addresses HS students YAF

Highlights of his talk in my words (not verbatim):
Positive sum game: "If you make me feel good, I'll make you feel good" (e.g., I like your product and price, so I'll give you my money).
Zero sum game: "If you don't make me feel good, I'll make you feel bad" (e.g., by shooting you or preventing you from drilling or penalizing you for not paying taxes).
Our right to happiness and freedom includes having the power to Increase our voluntary relationships and to reduce the involuntary relationships in our lives.
What kind of power do big evil companies have over you?! None!!! The only way they can control us is to go to the politicians and have them force us to interact with them through taxes and regulations, etc.
What kind of power does the government have over you?! Unlimited, if we allow it! Gov't officials can threaten you, throw you in jail up, take your property, force you to do business with companies you don't want to, and even kill you. [Voluntary exchange is not part of this scenario. There's nothing voluntary about it.] Taxes represent government claims on private property and, hence, your freedom (under Communism, they claim all of your property).

Tax Hikes & the 2011 Economic Collapse | A Laffer

"On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15% [Are the Seniors on fixed incomes paying attention?!], the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts. ... [as a result, taxpayers] will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be ... Reagan's delayed tax cuts were the mirror image of President Barack Obama's delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10% at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984 ... It has always amazed me how tax cuts don't work until they take effect. [See graph.] Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011."

Tax Hikes & the 2011 Economic Collapse | A Laffer

"On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15% [Are the Seniors on fixed incomes paying attention?!], the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts....[as a result, taxpayers] will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be...at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011"

Doomsayers beware... NYT 5/17/10

Trade inspires invention and increased quality of life. "...Dr. Ridley writes...People traded goods, services and, most important, knowledge, creating a collective intelligence: 'Ten individuals could know between them ten things, while each understanding one.'” Trade also inspired early Sumerians to invent checklists and numbers to keep track of inventory! Western Civ's roots are deep and fascinating!

Taxes Affect Supply and Demand

“What we should have fought for was representation without taxation.”
Sam Levenson

"A government big enough to give you everything you want is strong enough to take everything you have."
Thomas Jefferson

Walter E. Williams | Future Prospects for Economic Liberty

"...Most of what they [America's Founders] understood as legitimate powers of the federal government are enumerated in Article 1, Section 8 [of the Constitution]. Congress is authorized there to do 21 things, and as much as three-quarters of what Congress taxes us and spends our money for today is nowhere to be found on that list. To cite just a few examples, there is no constitutional authority for Congress to subsidize farms, bail out banks, or manage car companies....The fact is that it's unreasonable of us to expect even principled politicians to vote against things like crop subsidies and stand up for the Constitution [because they fear being voted out of office]. This presents us with a challenge. It's up to us to ensure that it's in our representatives' best interest to stand up for constitutional government." Keep the T.E.A. parties growing! Aside to Nancy et al: Astroturf doesn't grow, but our grassroots do! Thanks to Hillsdale College and its Imprimis.

Sharon Harris | The Invisible Hand Is a Gentle Hand

Invisible hand or government force? The "invisible hand is a gentle one. A free market is a gentle market. A free society is a gentle society. A cooperative, compassionate, and generous society. An abundant and tolerant society...There are built-in incentives in the marketplace for service, courtesy, respect. The invisible hand becomes a friendly handshake between cooperating adults...We don’t have a dog-eat-dog business world; we have a dog-eat-dog government." Aside: I want to read a Socialist description of the true Utopia working like a charm. What would a socialist utopian world be like to live in?..Soylent Green comes to mind.

John Stossel | "Real Jobs Create Wealth"

"...What is difficult for government is creating jobs that produce wealth. Pyramids, holes in the ground and war do not produce wealth. They destroy wealth. They take valuable resources and convert them into something less valuable." Government jobs do not equal private sector jobs. Find out why by reading this article on Patriot Post.

Quotes: Ludwig Von Mises

"Income no longer stemmed from the process of supplying the wants of the consumers in the best possible way, but from the taxes levied by the states apparatus of compulsion and coercion. He was no longer a servant of his fellow citizens, subject to their sovereignty; he was a partner of the government which ruled the people and exacted tribute from them." - Human Action

"The distinction between an economic sphere of human life and activity and a noneconomic sphere is the worst of their fallacies." - [i.e., everything is related to economics] Theory and History

"History does not provide any example of capital
accumulation brought about by a government. As far as governments invested in the construction of roads, railroads, and other useful public works, the capital needed was provided by the savings of individual citizens and borrowed by the government."

Walter E. Williams | "Economic Miracle"

"The idea that even the brightest person or group of bright people, much less the U.S. Congress, can wisely manage an economy has to be the height of arrogance and conceit." Read this column (and "I, Pencil") and you'll begin to see the miracle of the invisible hand that drives the free market.

Leonard E. Read | "I, Pencil"

Uses the construction of a lowly pencil to illustrate how “the invisible hand” functions in a free market. Easy-to-understand must read for every American starting in 7th grade. Click here to read "I, Pencil."

Walter Williams | "How can it be?"

"Here's Williams' roadmap out of poverty: complete high school; get a job, any kind of a job; get married before having children and be a law-abiding citizen. Among both black and white Americans so described, the poverty rate is in the single digits." Squelches the argument that the "rich are getting righer and poor are getting poorer." Tip: Commit time to reading Williams' archived articles. Click here to read this article

Thomas Sowell | "A Letter from Venezuela"

"...the consequences of price controls. The government of leftist President Hugo Chavez has imposed price controls -- and seems to be surprised that lower prices have led to reduced supplies, even though price controls have led to reduced supplies in countries around the world and for thousands of years." Makes sense, no? Then, why don't we get it? Read more. Tip: Read other articles about this topic and others by Sowell.

Stephen Moore | "Atlas Shrugged: From Fiction to Fact in 52 Years"

Whether you are an Ayn Rand fan or not, find out why her Atlas Shrugged has such a profound impact on so many leaders. This article is also a great summary for this long book. Click here to read this article. SparkNotes also has a good summary of the book.

Robert Fulsom | Myth of the Robber Barons

Click here to read article. This article is adapted from a lecture Professor Folsom gave at the History and Liberty seminar at FEE in June based on his book of the same title.

Friedrich A. Hayek (1899-1992) | "The Use of Knowledge in Society"

For the PhD in you. "If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders." Leave it to the invisible hand. Click here to read the entire article.