I think one reason some people don’t appreciate free-market capitalism is that they take prosperity for granted. They don’t really notice how prosperity has improved over the decades, so they don’t really think about how it happened. This is somewhat understandable. The slow unfolding of events over decades and centuries makes it difficult for anyone … Continue reading Prosperity Time Machine (1 of 2)
The growth rate of the US economy has been in the news recently, for a couple reasons. First, economic growth in recent years has been lower than the historical average of roughly 3%. This has led some people to predict low growth as the new normal. Second, the budget released last week by the Trump […]
A couple of weeks ago, Puerto Rico (PR) effectively declared bankruptcy. Although I am no expert on the PR economy, based on my limited research, the mess down there seems to illustrate how too much government causes problems for an economy. We can all learn some lessons from this. What are the problems? Over the … Continue reading Lessons from Puerto Rico Bankruptcy
Trade deficits have been in the news because President Trump has talked about international trade quite a bit. He and others think that a trade deficit is a very terrible thing. I mostly disagree. The heart of free-market capitalism is economic freedom. Freedom is usually beneficial for society, and that includes freedom to trade. Free … Continue reading How Bad Are Trade Deficits?
Last week, voters in Santa Fe voted down a new tax on soda and other sugary beverages that would have added 24 cents to the cost of a can of soda. The vote failed 58% to 42%. Score it as freedom one, nanny state zero. By itself, not a major issue, but symbolic of the … Continue reading Freedom 1, Nanny State 0
Last week President Trump’s team proposed to cut the corporate tax rate from 35% to 15%. Tax reform that cuts the tax rate and also closes loopholes is an excellent idea that would benefit all of us. Popularity of corporate taxes Taxing corporations is popular. Gallup and Pew Research surveys both show that more than … Continue reading Why Corporate Tax Cut Makes Sense
Economic freedom is the heart of free-market capitalism. Freedom and competition are significant reasons why capitalism provides greater prosperity. An April 5th Wall Street Journal article (Gillette, in Change, Shaves Prices by Sharon Terlep) provides an opportunity to discuss competition. The article describes Gillette’s situation as follows: “Gillette, which dominates the global razor business, has … Continue reading Competition is a Close Shave
A few weeks ago the mayor of Baltimore said she would veto an increase in the city's minimum wage to $15 per hour. She said it would put the city at a competitive disadvantage versus the surrounding area. Hurray for a moment of economic sanity in the “Fight for Fifteen.” The mayor is absolutely correct … Continue reading Baltimore Faces Reality on Minimum Wage
Economic growth is great because it helps improve the standard of living for everyone in society. So it is a minor tragedy that economic growth for the period 2001 to 2015 was dreadfully miserable. Growth History The graph below tells the story: This graph shows the annual growth rate of real GDP per capita (i.e., … Continue reading Dismal Growth 2001-2015
Why is Capitalism Better? Why is free-market capitalism superior to Big Government? It boils down to two big words: dignity and prosperity. Free-market capitalism provides the average person with greater dignity and prosperity. There are many reasons why this is so, but the one overarching reason relates to freedom. Free-market capitalism allows individuals to keep … Continue reading Foundation #3: Why Capitalism Better?