Downbound Train

So, President Obama obviously prefers governmental spending over more pro private consumption fiscal stimulus. He puts a lot in stakes with this package worth over $ 800 bn, though it should inject money and demand in the economic system and take care of some of Americas excess supply.
Though the left usually emphasise the supposedly larger [...]

Socialistic Tounge Infection

The hard economic times makes politicians defensive and protectionistic. Some time ago we wrote about Sarkosy’s “sovereign wealth funds” that would “defend” national interests (ZG).
Now Swedens prime minister Fredrik Reinfeldt have found how easy it is to take cheap points by stressing the importance of saving domestic jobs using protectionistic vocabulary. (Aftonbladet)
“If you have purchased [...]

Choices and Capitalism

Though we love capitalism and it´s way of creating prosperity and freedom we sometimes stumble upon some downsides. The idea of economies of scale, that the  advantage of producing large quantities often makes firms more productive and profitable (and products cheaper), sometimes makes certain markets dull.
Two examples. First; the car industry. Auto makers the last [...]

One Year Closer?

It is now official – according to the National Bureau of Economic Research, the US economy has been in recession since 2007 (The New York Times).
So, we are one year into the recession when many of us thought we were just getting there now. Lets think positively – if we are one year further in [...]

Re: More Theft

Answer to the post by Mr Rockerduck below. (The Zanzibar Gazette)
I agree, higher taxes most certainly do not cure a recession. But if the higher taxes are followed by an increase in government spending it won´t necessarly harm the economy shortsighted as also private consumption follows from the public spending through multiplicators. Hence also socialistic [...]

Everything but a Waste

Today, I heard someone refer to a margin tax reduction as a “waste of money”, as it didn´t stimulate labour supply enough. How can a tax reduction be seen as a waste of money? A tax reduction is not primarily a waste of government funds but an increase in the part of your income you can consume or [...]

The Glomgold Tax Model

In response to Mr Rockerducks utopic tax system I present my own. The model is based on three principles:

Fairness
A small government
Growth

As the government has to provide defense, a juridical framework, some goods not provided by the market as a police force, roads and some wellfare the 10 % tax of part of the workforce as Mr [...]

The Rockerduck Tax System

In response to our discussion on tax (The Zanzibar Gazette) I present… the Rockerduck tax system.
0 – $49,999.99 – 0 % tax
$50,000 – $5,050,000 – 10 % tax
$5,050,001 and up – 0 % tax
The same system could be adjusted for other currencies, allowing for differences in purchase power. The tax rate could be lowered over [...]

Minimum wage

On how minimum wages raises unemployment, see my graph below;

I’m under some time pressure these days so this will only be a short note, but labour economics is interesting and I’ll definetly write more about it in the near future.
I’m not really sure I follow your reasoning in letting the government subsidize labour costs but [...]

Minimum Solidarity? Or Maximum Intervention?

The Government of Hong Kong and its Chief Executive Sir Donald ‘Bow-Tie’ Tsang is planning to introduce a minimum-wage law (The Standard). This seems to be, at least to some degree, a turn away from Hong Kong’s usual laissez-faire attitudes.
Minimum-wage legislation is common throughout the world. In the United States there is a federal minimum [...]