Category Archives: Economy

Economic Patriotism

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President Obama’s favorite billionaire is making a run for the border. Warren Buffett’s Berkshire Hathaway will finance Burger King’s purchase of Canadian donut dynamo, Tim Hortons.

Economic Patriotism

As a Canadian operation, Burger King will still have to pay US corporate taxes on earnings inside the United States. But earnings outside the US will only be taxed at the rate of the country where they occur. US companies have to pay taxes in the countries where they operate and also must pay IRS the difference between those rates and the US rate. The Obama administration calls this economic patriotism.

Burger King’s move is called a tax “inversion”. Matt Levine gives a great explanation in this Bloomberg article.

The US corporate rate, including state and local taxes comes to about 40%. That’s the highest in the world outside the Islamic State jizya. Roberto A. Ferdman provides a nice chart in the Washington Post showing the tax rates of the 34 OECD countries.

The nominal corporate tax rate in the U.S., which combines national, state, and city-level tax rates, is nearly 40 percent—the highest across all 34 Organization for Economic Cooperation and Development (OECD) member countries. Canada’s, by comparison, is just over 26 percent.

James Foley

140822 james foleyThe New York Times reported that ISIS wanted $130,000,000 ransom for James Foley. European countries have paid ransom in the past. It’s a major source of income for ISIS. The US policy is not to pay ransom for hostages, on the theory it encourages more hostage taking.

The same theory doesn’t seem to apply when it comes to swapping terrorists for American hostages. We gave up five of GITMO’s worst bad asses to bring home alleged deserter Private Bergdahl.

Bergdahl’s parents were flown in from Idaho to celebrate the joyous occasion with President Obama in the White House Rose Garden.

James Foley

James Foley met his grim fate with courage. His parents showed the source of that fortitude in their meeting with the media to discuss their son on the day of  his death.

Obama played golf.

Poor Mouth

140625-hillary-poor-mouthHillary’s book tour got off to a poor start during an interview with Diane Sawyer.  We learned that Bill and Hill came to the White House “with no money” and left “not only dead broke but in debt“. People used to call her Patches.

It wasn’t for lack of effort, though, or “dint of hard work” as Hillary put it.

The threadbare baggage the Clintons brought to Washington from Arkansas in 1993 included the Whitewater real estate scheme. They lost $40,000 on that one. According to prosecutors, dubious loans through a failed S&L didn’t profit them either. More hard work and nothing to show for it. Plucky Hillary did finally manage to shoo the wolf from the door by turning $1,000 into $100,000 on a cattle futures trade. She attributed her investing acumen to reading the Wall Street Journal.

All that hard work finally blossomed into a happy ending with $200,000 speaking fees, multi million dollar book advances, and a bankroll over $100,000,000.

As a candidate for the 2004 nomination Howard Dean said he led the Democratic wing of the Democratic Party. Poor Patches now leads the limousine liberal wing of the Democratic Party.

Only in America.

Smart Money on Cantor

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Eric Canter’s role as House Majority Leader is dead and buried. The smart money assumed Cantor was a sure thing. But he lost his seat in a primary challenge by David Brat, a college economics professor.

As Majority Leader Cantor couldn’t avoid the insider ways of Washington. That didn’t sit well with voters in his Richmond, Va district. He also moved toward comprehensive immigration reform which Ann Coulter insists only sits well with Washington Insiders.

Smart Money

Speaking of smart money, Brat only spent $122,793 on his campaign. Cantor spent that much on steak houses!

In the general election the conservative economics prof will face a sociology prof, Jack Trammell… from the same faculty lounge at Randolph-Macon college.

 

Carbon Cuts

140610carbonPresident Obama made another end run around Congress in order to end the basis of all life on earth.

A 30% cut in carbon emissions from 2005 levels and must be achieved by 2030, or else.

Not a big deal says Robert Samuelson. Carbon emissions are already declining without EPA orders.

By 2012, CO2 emissions had already dropped to 2,023 million metric tons, a decline of 379 million metric tons. That’s 53 percent of the 2030 target. All of this has occurred without federal regulation of greenhouse gases.

The proposal’s real significance is that, if blessed by the courts, it would create a complex and costly regulatory apparatus that, in the future, might govern much of the U.S. economy.

China and India will more than make up for any U.S. cuts. But if you’re going to do it, Samuelson thinks the best way to reduce carbon emissions is to tax them.

If you want less of something, tax it… But there’s little public taste for this. Indeed, support for any anti-global warming legislation is weak. In 2009, when Democrats controlled the House and Senate, they could not pass a bill.

So Obama resorted to regulatory fiat: The EPA sets emission limits under the Clean Air Act. The proposal is hugely complex. Each state receives a target that can be met in many ways, subject to agency approval. This will be challenged in court and, if upheld, will strain the EPA’s administrative capacity. Winners and losers would be determined as much by political pressures as by market forces. It would be a bonanza for lawyers, lobbyists, economic consultants and public relations advisers. Whether it would affect the world’s climate is more questionable.

 

Krauthammer says the whole thing shows Obama is operating under his own constitution.