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September 23, 2010 More illegal immigration means more jobs Is it possible for someone who works hard and produces much but accepts little pay and consumes little to be bad for the economy? Is such a person bad for job creation? What about such a person's impact on the nation’s overall prosperity? The conventional anti-illegal immigrant wisdom would say yes. A rational application of sound economic principles and a review of historical evidence would say no. Your contribution to this world is what you produce, not what you consume. Modern, mainstream economics tends to get this foundational principle backwards which results in all kinds of erroneous beliefs, from the notion that savings is bad, to the fact that the top 2% of the country accounting for 30% of all the consumption is good, to a man who is willing to work for less than another man is bad. Here’s a good thought experiment to illustrate the ludicrousness of this position: volunteer work. To adhere to the mainstream school of thought is to believe that volunteer work is detrimental to society and that Habitat for Humanity is an econo-terrorist group. Does anyone honestly believe the world would be a worse place with more volunteer work? Then, instead of going all the way to volunteer level and working for zero, what’s the harm of simply working for a wage somewhere between zero and the wages that other men are willing to work for? Is there a difference between working 8 hours for $10/hr and working 4 hours for $20/hr and volunteering the remaining 4? A worker creates his contribution to society when he finishes his work, not when he gets paid. His payment and his resulting consumption from that is what he takes from society. To subscribe to the backwards thinking, consumption-worshiping model is to believe that Paris Hilton is the model citizen for economic prosperity and that Louis the XVI and Marie Antoinette were great for the starving peasants of pre-revolutionary France. There is no shortage of jobs; there is only a shortage of money to pay for those jobs. By working for low wages, illegals free up money to be spent on entirely different products and services produced by entirely different workers. This increases overall prosperity, economic growth, and employment. Real prosperity and real economic growth stem from increases in productivity. Productivity is simply getting more output from the same amount of input. It is an irrefutable fact that a man who can produce the same amount of work for $10/hr as another man can produce at $20/hr is twice as productive. This basic concept is the same reason that free trade increases economic growth, prosperity, and jobs. Finally, the historical evidence also supports a net positive. It is true that illegal immigration lowers the wages and employment levels of competing workers. But it is also true that, when considering the total economy, wages, and employment outside of competing workers, its total impact is a net positive. It is also true that illegal immigrants pay more in taxes than they cost in social services. A couple of weeks ago on my back porch, I had one group of friends at the throat of another group of friends during a campaign party. Given the nature of the night, it was full of spirited debate covering a wide range of issues both social and economic. The only topic that got so heated that the thought of a fist fight breaking out crossed my mind was illegal immigration. Our country has many problems, and many of them are complex. Perhaps some of the emotion comes from the fact that it is seemingly easier to understand. In spite of the argument I have laid out here, I concede that illegal immigration is a problem, but the solution is to turn more of it into legal immigration through issuing more work visas, not to go the walls, have guards with guns, and have predator drones flying on US soil. On a prioritized list of the problems that are burning this country down, illegal immigration is probably #7 or #8 at best. At the very top of the list would be the collusion of big business with big government to crush everyone else. Anger is a terrible thing to waste. Every ounce of anger, every ounce of hate that is misdirected at illegal immigration is an ounce of anger and hate that is spared from the corrupt politicians who rightly deserve it. It is only by focusing our energy at the top of the list of what is burning down our country that we have any hope of putting out this fire. September 16, 2010 Congratulations to Doctor Marcelo Cardarelli I ran a campaign of truth and pragmatic problem solving. It was firmly rejected by those who voted in the Republican primary. Given that much of my platform pointed out the logical fallacies of party hardliners, it should come as no surprise that party hardliners did not agree with my platform. After all, in terms of credibility, what is mine when compared to the radio talking heads that so herd the loyal flock? When listeners don’t understand the subject matter themselves, it is a contest of credibility when opinions differ. The country is broken; the party is broken, and the party system is broken. I thought there was an appetite for brass-tacks truth this year. I was wrong. Doctor Cardarelli is probably the closest to me ideologically of all the other candidates. During a candidate debate, he said he supports honest money and a return to the gold standard. I learned that he is also a small business owner, and he specifically agreed with my point that the payroll tax and small business regulation are both oppressive. He is also the most moderate on what are traditionally divisive and polarizing issues. Having met him in person, I can say he strikes me as a good, honest man, who is genuinely concerned about the direction of his country, knows the issues, and offers some thoughtful solutions. I wish him the best, and I have reached out to him to offer my support. I will continue to post economic commentary, although not as frequently as I posted during the primary campaign. September 14, 2010 The path to prosperity: Many of the policy decisions that impact our lives are made based on mistruths about and misunderstanding of what it takes to create prosperity. I’ve compiled a list of the truth antidotes to some of the most notorious of these. Some of my principles can be found in textbooks. Some cannot. Some directly conflict with what is in most textbooks. Nevertheless they are all based on sound theory, on historical evidence, on common sense, and on independent critical thinking to answer the key question: “How do we create the most prosperity for the most people?” 1. Falling prices are natural; falling
prices are good. Fighting this steals from the working
class and gives to the investor class. We will never hit our goals if we keep aiming at the wrong targets. September 13, 2010 What Republicans must do to win in Democrat territory If Maryland Republicans are to have any hope of winning in November, they must offer voters a clear and credible message of how to solve our nation’s biggest problems, namely huge unemployment and huge deficits for as far as the eye can see. In a state where Democrats outnumber Republicans 2:1, running on the broad, traditional conservative platform is not the path to victory. Instead, dropping the divisive social issues (I call them divide and conquer issues because they only serve to ensure the permanent power of the ruling class) and focusing on an amended economic theme zeroed in on helping the middle class and small business is the path to victory. The Republican Party’s #1 problem in MD is that the majority of the state simply does not agree with its core platform. Even if an underdog candidate could muster the resources to become a household name, he still would be condemned to sacrificial-lamb status if his message runs with the party line. Does anyone outside the bubble of those who have been running in the Republican primary really think that a platform of cutting taxes on millionaires and Fortune 500 companies, with a side of conservative social issues, is going to compel roughly a quarter of registered Democrats to cross party lines? The Republicans can overcome this handicap without abandoning their core principal. Facing a nation in the depths of economic malaise, Ronald Reagan summed up core Republicanism: “In this present crisis, government is not the solution to our problems; government is the problem.” On the broad spectrum of more government vs. less government, Republicans can still be staunchly on the side of less government, but the devil is in the details. Is there anything inherently anti-Republican, big government or socialist about aiming tax cuts at the middle class or small business? So why don’t Republicans embrace it with a payroll tax cut? Is there anything anti-free markets about ending the central planning within our banking system? So why don’t Republicans other than Ron Paul support it? Is there something Marxist about saying small businesses need to be exempted from certain regulatory barriers? So why don’t Republicans get onboard with exempting the first 100 employees from the payroll tax? Finally, 2010 is the year to get down to brass tacks on exactly what spending to cut. 40% of spending is now borrowed money, and any candidate who fails to identify specifically what and where to cut is being more of a politician than a problem solver. I am the only candidate who has been endorsed by anything other than right wing conservative groups or politicians, and I am the only candidate who offers a detailed action plan to balance the budget and create jobs. I am the only candidate with a chance of being anything beyond the biennial Republican sacrificial lamb because I am the only candidate with a platform worth building on. September 12, 2010 Rich are getting richer Census figures being released for 2009 are expected to show record levels of poverty in the US, both in growth rate, and as a percent of total population. This comes at the same time Wall St. Bonuses are breaking records. Another interesting trend supporting this observation is an explosion of big/luxury SUV sales and luxury auto sales at the same time car sales are falling, especially small cars. Right now the alternative to class warfare is class dominance. Before I am accused of being progressive or socialist for pointing this out, I remind you my platform is for smaller government, lower taxes, and less regulation. I simply want to aim those tax cuts at the middle class and small business as opposed to the Republican/Paul Ryan/Marie Antoinette plan that wants to aim them at millionaires. My core philosophy is that more free markets, or a more laissez-faire approach, would cure this inequity and injustice. History has shown that a pro-inflation Fed policy favors the rich at the expense of the poor. It is central planning at its worst. Our tax system is a regressive payroll tax jammed on top of a progressive federal income tax that results in certain lower incomes paying a higher percentage of their income in taxes than millionaires pay. Our regulatory system is a complex burden that stifles business creation and growth, thereby choking new competition from competing with the big boys, thus actually helping big business at the expense of small business, consumers, and workers. So many people, especially Republicans, are concerned with top-down redistribution. The truth is that our government’s primary direction of redistribution these days is from the bottom up. That’s a problem that must be stopped, and the solutions are to infuse more free market workings into our regulator, tax, and monetary systems. In short, I offer free-market solutions to what are traditionally progressive concerns. And that is why I am the best of 5 Republican underdogs to take on Dutch Ruppersberger in a heavily Democratic district. September 11, 2010 Campaign party photo
September 10th, at a campaign party at my home. I pulled out my old bass and played for my friends. Photo by SideShow Bob. September 10, 2010 Ruppersberger's history of
preying on the poor: Ruppersberger’s story is one of continually enriching himself by preying on the most vulnerable members of our society, all the while passing himself off as a nice guy who cares about the average working man. The truth of his history is detailed here, with links to supporting evidence for everything. Dutch Ruppersberger started out as a debt collector shaking down poor people who couldn’t pay their rent. He violated several federal credit laws in the process, ultimately settling a federal lawsuit for $40,000. He graduated to County Executive where he tried to steal waterfront proerty from the working class so he could give it to rich developers. Most recently he voted to take money from the working class to give it to Wall St Bankers while claiming it was in the best interest of those whom he took from. He earns almost $300,000 a year double dipping from the taxpayer, with personal assets of over a million dollars, at a time when the average working man is struggling to keep a roof over his head and food on the table. How this predator has managed to make it this far in his life is a testament to the corruptive forces of money and politics. November 2nd Dutch needs to go, and out of a field of 5 Republican underdogs running in Tuesday’s primary, I have the best shot of taking him down. To beat Ruppersberger’s name recognition and million-dollar-plus campaign war chest, it’s going to take 2 weapons that I have in spades:
I am the “pragmatic economics independent” of this election. I am “getting out bold ideas” with a detailed action plan to close the deficit and create jobs. The other candidates running are good men who would be huge improvements over Ruppersberger, but they are running as Fox News Republicans and don’t stand a chance in this district. Only I offer an economically focused, independent, pragmatic plan with specific solutions to our pressing problems, a plan that has the real potential for Democrat support. Please share and repost. Maryland 2nd District voters need to know the full history of the man who has represented them for 8 years. September 9, 2010 Radio host: "Thanks for bold ideas we don't hear every election" Yesterday I was interviewed on the radio by Mark Kreslins [inside the black box on the left hand side, Sept 8, Hour 1, minute marker 20:20]. After going over my detailed plan to close the deficit and create jobs for about 15 minutes, the host thanked me for being bold and for “getting ideas out there that are not the vanilla flavor we hear every election cycle.” His assessment is similar to the City Paper’s endorsement of me that said I “sound more like a pragmatic economics independent than anything else.” This is not the time for platforms of platitudes. All of us want smaller government, lower taxes, more jobs, and more prosperity. All of us believe in the sanctity of the US Constitution. The question for your candidate is, “If elected, what specifically are you going to do to solve the problems we face?” Forty cents of every dollar that our government spends is borrowed. The deficit is as big as 10% of the economy. Unemployment continues to bounce around 10% with no improvement in sight. Entitlement programs are a ticking Ponzi debt bomb that are on pace to make Bernie Madoff look like Mickey Mouse. But we still have time to right the ship and avoid this iceberg if we are bold enough to discuss these problems frankly. Eighty cents of every dollar that our government spends is on either private consumption via entitlement programs, or on destruction via the defense department. This is not the path to prosperity in a free enterprise market economy. We must cut the sacred cows, and we must cut taxes on those who need it, namely on small businesses and the middle class by cutting the payroll tax. The best way to expand payrolls is by cutting the payroll tax. September 8, 2010 City Paper: "Only Dowlut offers anything resembling a comprehensive economic plan" I was just endorsed by the Baltimore City Paper:
Two other candidates in this primary race have racked up endorsements from a combination of local Republican clubs and hard-line conservative groups. That might win the primary, but it won’t win the general. My City Paper endorsement shows that I can cut across party lines, have “pragmatic, independent, economic” solutions, and ultimately I’m the best underdog to upset Dutch Ruppersberger. My message is simple: cut taxes on the middle class and small business, not on the rich and Fortune 500 companies, and the sacred cows of entitlement and defense spending must be cut if we are to avoid insolvency. I am the only candidate with a detailed action plan to close the deficit, expand payrolls, and put us back on the path to prosperity. September 6, 2010 The Justin Bieberization of
America What is it with our need to worship idols? What is it with our need to be part of something and to conform? Whatever happened to the American spirit of individuality and free thinking? Two practices are critical to a free society:
The political party system is very much an exercise in top-down power and group think. Our country will be more free if we start electing individual thinkers over group conformers. To do that, the perception of the general election as more important than the primary election -- and the corresponding voter turnouts -- must be reversed. If you’re only going to vote in one election, make it the primary election. That’s where the real choices are. Neither of the major parties really believes in freedom. The D’s want you to be controlled by big government. The R’s want you to be controlled by big business and organized religion. I want you to be controlled by yourself. September 3, 2010 Trickle down, Paul Ryan, and smoke & mirrors The only thing worse than rich people saying tax cuts for the rich will help everyone else is everyone else believing it. Tax cuts on the rich compared with no tax cuts at all will help everyone else. But compare tax cuts on the rich with tax cuts for everyone else, and it is obvious which scenario helps everyone else more. If you and I are in a closed economy and someone gives me $100, it certainly helps you, but not as much as if that someone had given the $100 to you instead of me. Before I detail exactly what makes Congressman Paul Ryan’s plan smoke and mirrors, I must assert myself as a champion of lower taxes, smaller government, and reduced regulation. These are the core concepts of my detailed plan to balance the budget and create jobs. If wanting to focus those tax cuts on the masses rather than on the few, the powerful, and the elite makes me not a true conservative, then so be it. A conservative blogger who moderated Monday night’s debate (audio here) has already said that my ideas “won’t make me any fans among … the conservative grassroots.” That’s fine. I’m running to get out specific ideas and solutions and to speak the truth, not to cater to a dogma. Ryan’s plan aims to turn this country into a society similar to pre-revolutionary France where the top 3% paid no taxes, and where everyone else carried the burden. It would greatly favor those whose money works for them at the expense of those who work for their money. Specifically, Ryan's plan would end all taxes on investments: interest, capital gains, dividends, and estate tax. Of course regular people have income from these sources, but income from those sources is a small portion for all but the richest people in our country. Ryan's plan also would end the corporate income tax. All of these taxes would be replaced with a European style Value Added Tax (VAT), which is just another way of saying a consumption tax or a national sales tax. Consumption or sales taxes are regressive; that is to say that they are disproportionately burdensome on lower incomes. Poor people consume a higher percentage of their income than rich people consume. Smoke and mirrors trick #1: 1. End every tax that taxes the majority of rich people’s income and replace it with a regressive tax that taxes a higher percent of lower incomes. Ryan’s plan also offers a choice between either the traditional income tax structure (with its various brackets and deductions), or a simplified plan that taxes 10% of the first 50k of income and 25% of all income beyond that, but with no deductions. The Tax Policy Center has estimated that the simplified alternative would most benefit those making between 100k and 500k. The simplified alternative also would lead to $6-$7 trillion dollars less tax revenue over the next decade if everyone chose their best tax saving plan, something that any $50 software can figure out. Smoke and mirrors trick #2: 2. Blow a huge hole in the deficit, giving tax cuts to those making 100k-500k/year. Ryan’s plan brags of ending the Alternative Minimum Tax (AMT). The AMT taxes your first 47k at 0%, and then everything up to 175k at 26%. The Ryan alternative taxes your first 50k at 10% after allotting for a standard deduction of roughly 10k, then everything beyond that at 25%. Smoke and mirrors trick #3: 3. Replace the AMT with a plan that will have most incomes pay at least $4000 more, and try to pass it off as an improvement In short, the tax side of Ryan's plan shifts the tax burden downward onto those who can least afford it. It produces the real possibility for the ruling class to pay a much smaller percentage of their income than everyone else does. Thomas Jefferson believed in the estate tax because he feared precisely what is happening today. Jefferson feared that one day a ruling class would rise up and be so powerful that it could challenge and control our nation’s government. Many would agree that the bank bailouts announced the arrival of that day. Ryan wants to make sure that the sun never sets on these new Masters of the Universe. September 2, 2010 Harvard Econ Professor endorses payroll tax cut Greg Mankiw, professor of economics at Harvard University, prefers a payroll tax cut over any other type of tax cut to get the economy growing again. Excerpts:
I have long championed a payroll tax cut over any other type of tax cut as part of my detailed action plan to close the deficit and create jobs. The most direct way to expand payrolls is to cut the payroll tax September 1, 2010 All five candidates for the GOP nomination for Maryland's 2nd Congressional District met in a public forum on August 30, 2010, at the public library in Towson. I arranged the event, and Matthew Newman of OldLineElephant moderated it. Matt Newman audio recorded the evening. Audio recordings are in three parts and are available here: Opening statements, in Part One, are in
this order: On November 2, 2010, Dutch Ruppersberger needs to retire. All five Republican candidates are honorable men offering themselves for public service. Any one of the five would be better than Dutch. September 1, 2010 Does either party deserve to lead? Peter Morici, an economist and professor at UMD who frequently testifies before Congress, has endorsed the exact tactics that I am using: getting specific with a credible action plan to close the deficit and to create jobs. Excerpts from Morici’s article:
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