What is the 4,000 year old economic lesson? It is very simple. Going back to the Babylonian Empire and continuing forward the simple lesson is this—price controls don’t work. You can not simultaneously control the price and quantity of anything. If you try to control the price of an item or service, the result will be reduced quantity and quality. In other words waiting lines will form. Let’s look at price controls in another way. You know what an equal sign (=) looks like. Now imagine that on one side is price controls. The question is what is on the other side? The other side of the...

With the recent passage of ObamaCare, the President now turns his attention to job creation. Yet, ObamaCare will be a big time destroyer of job creation. Companies that have 50 or fewer full-time employees are exempt from having to provide health insurance. They have absolutely no incentive to go over the 50 limit. Those companies that are over the 50 limit by a dozen or so full-time employees will, most likely, layoff employees to get under the 50 limit. They could also get under the 50 limit by laying off workers and hiring them as temp or part time workers. Again, this does not exactly increase...

There is an old saying that says that capital (money) goes and stays where it is treated well.  Unfortunately, that is not currently the political policy in the United States.  Raising the capital gains tax and taxes on investors will do nothing to promote long term economic growth.  Since 1980, almost 100% of the net new job creation has come from firms opened 5 years or less–in other words small new businesses.  Yet the massive Federal deficits that feed the government and starves free enterprise looks like a prescription for long-term economic/business stagnation and falling living...

Hello, I am a strong believer in brevity.  These four simplified laws of economics are: 1. There is no such thing as a free lunch.  There is always a “price” which has to be paid by someone.  This law is of paramount importance. 2. The markets are the masters.  Price controls do not work.  You can not simultaneously control both the price and quanity of anything.  If you control the price of any good or service, the supply of that good or service will dimish. 3. Economic events do not exist in isolation.  We do not live and work in an economic vacuum. 4. Economic and politics are...

Hello, With the just released national unemployment figure of 10.2% for the month of October, 2009, it would be wise to look at the Obama’s administration basic philosophy to drive down unemployment and get the economy moving. Their basic assumption is that for every $1.00 they spend on domestic spending will add $1.50 to the GDP.  In other words a 1.5 multiplier.  Post World War II experience teaches a different story.  Research into the effects of government spending shows the the best multiplier in the post WWII period was  .80.   Anything less than a 1.0 will lead to negative...

Hello, It’s coming—the tsunami of All Tax Increases. This is tax on all carbon emissions (also known as the cap-and-trade) generated in the U.S. It is a massive tax increase of at least $1.2 trillion in the next ten years—and possibly going higher. It will hit all sectors of the economy with the result of draining liquidity, buying power, and capital out of the U.S. economy. This is scary stuff that can do further harm to the economy. It is nice to hope for the best, but be prepared for the worst.   I strongly encourage you to plan for the above when formulating your plans and...

Hello, First, you must define who are the real “movers and shakers” of economic growth?  The genesis of economic growth are those individuals who put their money (capital) at risk to start legitimate business enterprises and hire people. Therefore, to get our business economy moving in the direction of sustained growth, implement these three simple tax policies: Effective January 1, 2010 the Capital Gains tax rate is ZERO. Effective January 1, 2010 the corporate income tax rate is ZERO.  Corporations don’t pay taxes, people do (corp. pass on all taxes in higher prices for goods and...