no one is suggesting we not trade, what mfrs like mself are asking for is the ability compete on a level playing field
o that as an example above my exports are priced competively, and competitve imports do not have an unfair cost advantage - precisely because they get a rebate and I pay VAT tax
Because if there is a consensus of perception on EP it is trying to recreate a bubble economy is a really, really bad idea.
You're in the right place of outrage too. (Gulag).
I've thought they should call out the national guard, put a moat, barbed wire around D.C., call it the "no lobbyist zone" and create a "Berlin wall" of no lobbyists, take back the city.
So, you want to deny all U.S. manufacturers the ability to export.
Exports mean out of the country.
So, what do you think will happen to the United States economy and businesses if they are 100% denied to export their goods and services?
China is an import.
That is the reason for the VAT. The WTO has ruled that what the EU, China, India do with their rebates to their manufacturers on VAT is legal. So, one cannot deny the Chinese their VAT practices.
I'm not endorsing the WTO, I'm describing why various economists would be looking at a VAT as a method to level the trade deficit and how the VAT is simply not just a "consumption" tax for these reasons.
Try as they might, bankster fronts, Summers, Geithner et al, simply won't get their desired bubble back. The truth seems to stay just ahead of their manipulations, witness the rate spreads earlier this week. And perhaps one of the biggest scams of the last couple of decades, the "get-an-advanced-degree" con designed to support the six-figure lifestyle of professorial academia, would seem about to come apart. One hopes it strikes the law and "journalism" schools the hardest. If we could incarcerate the entire political class and create a gulag for lobbyists, perhaps we could then embark upon a genuine program of reindustrialization. God knows we need such a program. I'm all for dealing decisively with the people at the core of today's problems before we begin to treat the effects, however. There's a right order to these things.
Seebert, I cannot even get you to realize that tariffs would be ruled illegal by the WTO. You want some sort of battery as money.
So, be aware, again, we do not allow Economic fiction on the site.
So, the entire reason various groups are examining a VAT is an alternative to get out of the WTO...since they cannot and the unfair trade agreements are killing their business (and workers).
the fundamental defect of the free market system [is] its incapacity to to distinguish between "enterprise" and "speculation" and hence ... its tendency to get dominated by speculators, interested not in the long-term yield on assets but only in the short-term appreciation in asset values.
It is a great quote, but it is a United Nations pdf file that will not allow me to copy and paste, The Present Crisis and the Way Forward. Which is just as well, because I urge anyone interested to go and read at least the first nine or ten paragraphs. Patnaik explains that what Keynes wanted was not really a stimulus in times of depression, but
a comprehensive "socialization" of investment whereby the State acting on behalf of society always ensured a level of investment in the economy, and hence a level of aggregate demand, that was adequate for full employment.
Which of course reminds me of what Stirling Newberry wrote a week or two ago in The Depression that Hayek Built in which he writes that over the past three decades:
the fight, in economic ideology, was over how much of the investment in the future should be handled by a very wealthy elite, and what fraction should be handled by the public through government. The ideology of the time was that the wealthy elite . . . was always right, and the public was always wrong.
This theory has been proven false. The economic destruction of the New Depression, and Depression is the correct word, will extend for years, and has wiped out the fictional gains of the last 30 years. We are now exactly where we would have been without this experiment in a dictatorship of the propertariat, and we have nothing to show for it but a surplus of posh apartments and private jets.
Dictatorship of the propertariat ! Newberry sure can bang the nail squarely on its head !
And disagree with your interpretation of the WTO's ruling.
Specifically, the WTO ruling was on INDIRECT taxes, not the VAT in particular. There are other forms of indirect taxes we can use to do effectively the same thing, while addressing the trade situation more directly.
One of these is the ITYT- the Intermodal Transfer Yard Tax. I propose we add a tax, at *all* domestic and international ports, of $1/3200 cu ft/mile from originating address on shipping label.
This is an indirect tax (it's assessed by the port as a part of their fees for moving standard cargo containers around, that's why the 3200 cubic feet, a standard 40' cargo container). Because it's on VOLUME instead of WEIGHT, it affects smaller, cheaper items less per item. Because it is on DISTANCE- it encourages and gives a boost to local manufacturers, and hits foreign trade (intercity, interstate, or international) harder than the local business serving local customers with their own trucks that never hit an intermodal transfer yard.
And thus, in the end analysis- it's progressive because it supports local jobs for local communities, which is where progressive is supposed to be at.
More on this once I find a proposed VAT to compare to, and try to figure out why these rebates aren't called what they really are: subsidies.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
By not exporting and denying the Chinese the ability to rebate money to their manufacturers?
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
And in fact, I'm working on an aggregate analysis in agreement with those papers that proposes an *ALTERNATIVE* to enacting VAT tax here with a tax that is both indirect *and* specifically hitting *trade* (as opposed to hurting small, in-state non-border businessmen).
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
and we've called for mass demonstrations chanting jobs, jobs, jobs, jobs. But even cooler, we go to the original statistics and look at them instead of just media reports.
The reason "consumer confidence" is a leading economic indicator is the nation's economy is 70% consumer. Of course I think that's absurd and we need to restructure the economy into a production and innovation economy, not just something out of the coneheads.
So, what is most interesting from NDD's post here is how consumer confidence and the actual buying of mass quantities is divergent.
It's not correlated, which as far as I know is new, although I would have to see a graph/stats on sales vs. consumer confidence over time.
On unemployment, you are right they sure spun the beyond belief official unemployment numbers as a sign the recession is peaking or at the peak. On the other hand, unemployment is a lagging economic indicator.
But, the concept of a jobless recovery is also something we are hammering on EP.
Consumer sentiment/confidence is reflecting the stock market and Stock market is seeing consumer sentiment/confidence. But the reality is that people are either still deleveraging and are not in a position to spend.
The key here, which I keep trying to pound on, is how other nations give rebates on VAT for all exports. That is the key element and why it is a "tax on imports" de facto even though yes, VAT is across the board. It has to do with the WTO ruling on VAT and how other nations are using their VATs. I've posting this information now 3x in links, in comments.
So, by enabling the US to impose taxes on imports plus give a rebate on domestic goods exported is how it is a trade tool.
It's also not 12% across the board. One can have different treatment per category, different tax levels per category.
Of course it would have to be significant offset in order for it not to be regressive and "yet more taxes" but it's about the only thing the WTO will allow to fly. They will not allow tariffs and ruled against other US taxes which were in essence trying to balance for how other nations give tax rebates (de facto) for their national exports (which I posted a link on).
Anyone paying the least attention to the way in which economic events are interpreted - as opposed to being reported - by our controlled media, readily grasps how the notion of "green shoots" ever had an opportunity in present circumstance of finding its genesis. At Bloomberg, one would find it odd not to encounter a news entry along the lines, "New unemployment claims at 630,000, down 3,000, in sign recession is close to ending". The daily hammering one gets with this kind of oafal eventually leads one to a visceral suspicion of almost anything reported at such sites. The whole thing is cut from the same cloth that fashioned public support for the phony casus belli that became war with Iraq and is now threatening to become the same with Iran. Next they'll be pulling some poor, unsuspecting, dark complected schlub out of an apartment in Jersey City, and waterboard him into "confessing" involvement in a conspiracy to place an Iranian neutron bomb in the cellars of the Chrysler Building. And AIPAC Stephin Fetchit, Barak Obama, will be soiling his pants in his haste to commit unheard of levels of new troops to the the Iraqi border with Iran so as to defend "American interests".
If you're looking for a little truth in reporting on the economy, read Michael Hudson, Mike Whitney and Paul Craig Roberts over at CounterPunch. Maybe you'll get angry enough to join the mass demonstations when unemployment - even as it is presently calculated - tops 12%.
That good comes into the United States untaxed because we do not have a VAT on imports. That gives the total price of the import an unfair advantage over US goods where our taxes are distributed already onto that particular competitive item.
There is no such thing as "a VAT on imports". There is a VAT, which applies to all sales that are not exempt, and so it applies to imports as well.
The name for a "tax placed on imports" is "tariff". So addressing the fact that production in the US has a 12%+ flat rate income tax imposed on all labor under $100,000 per year while the import has been exported tax free would be a 12% across the board non-discriminatory tariff on the product.
Its specific discriminatory tariffs that are regulated by the WTO. A non-discriminatory tariff is allowed for a country in serious deep water on its current account, like the US, and is much simpler to put in place than a VAT.
The current system is the problem. But entrenched systems are not changed by intellectual critique, they are changed by knitting together a progressive change coalition that is able to grab enough power to change the system.
And coming up with policies that are improvements that can serve as some of the threads binding the coalition together is even harder than coming up with some idealized notion of "the best" policies. Compromising in the interests of a "large enough" coalition without compromising so much that nothing is accomplished ... there is no optimum there. Its a balancing act consisting of a series of strategic choices.
What was in use was the oversimplified hydraulic "Keynesian" economics of Samuelson ... the part that survived the ultimately failed effort to place bit and pieces of the General Theory on neoclassical economic foundations, despite the fact that the General Theory indicated that neoclassical economics is radically incomplete.
But Samuelsonian theories were no more "Keynesian" by virtue of their trademark than Fox News is "Fair and Balanced" by virtue of its trademark. Treating the General Theory as debunked by policies that ignored the majority of the General Theory is like treating "Fairness" as debunked by actions of Fox News.
Indeed, all of the parts of the General Theory that would have guided policy to prevent the financial collapse we just experienced had to be left out when the General Theory was neutered to make it less incompatible with neoclassical economics, because the General Theory was founded upon the observation that there is fundamental, intrinsic uncertainty in the world, and fundamental, intrinsic uncertainty simply cannot be included within the type of model pursued in mainstream economic theory.
Government deficit spending is quite patently not what got us into this mess, since part of the time we were creating this mess, we had budget surpluses. It was far more our tolerance of national deficit spending in the guise of the unsustainable current account deficit of Clinton/Bush that got us into this mess.
People that believe in simple minded theories that all budget deficit spending is good in a recession are like those that believe in simple minded theories that the expansion of less than 5% of the money supply in the face of a decline in the other 95% is going to automatically translate into inflation ... simple minded theories are never reliable. Sometimes something happens that fits the theory, which is taken as confirmation, saved and pointed to time and time again, and events that do not fit the simple minded theory are simply ignored.
Now if only a major portion of the USA could understand what the government is doing to us (oops better stay Orwellian) What the government is doing for us.
There are just so many, many, many people that will just tip their hat to the elected whiz kids and allow them to do what ever they want to do.
I am in a blue mood for our economic health in the near term. In this case near term equates to years. This current Congress has created more debt than the total of all of the previous Congresses since the beginning of the Republic. How long can they keep these plates spinning?
I like the cattle farm analogy. Too many businesses look at employees as liabilities (as do modern accounting methods). If dairy farms looked at cattle that way, they would end up selling all of their cows and go out of business. One of the things that made the US great was the idea of employees making companies better. Employees are assets to a company, not liabilities. When companies and the government start realizing this, they will grow stronger and the economy will improve.
To clarify, all of the infrastructure spending is dead on, although I question if the best projects are/will be selected. Why I rail against the Stimulus itself is the tax cuts and more importantly how the money is going offshore and assisting in sending jobs offshore. I believe the projected jobs were 25% I.T. and IBM is grabbing those contracts, all the while they are offshore outsourcing them.
Same problem with other aspects of these projects and that defies Keynes for it was supposed to be domestic income exclusively.
That would make yet another nice post, just how wise some of the infrastructure projects which have enabled major commerce have happened throughout U.S. history, esp. in the 1930's etc. I mean right now cities and states are busy selling and leasing these things to foreign nations and private sector.
You are correct about the causes of the stagflation. That is separate from Keynesian theory. The problem with Keynsianism is that his theories didn't account for stagflation at all.
In a Keynsian world stagflation didn't exist. His theories said that inflation and growth went hand in hand. Deflation and recession went hand in hand.
But recession and inflation were mutually exclusive in Keynsianism.
That's a simplified version of it. Hopefully someone else can expand on it.
Exactly
no one is suggesting we not trade, what mfrs like mself are asking for is the ability compete on a level playing field
o that as an example above my exports are priced competively, and competitve imports do not have an unfair cost advantage - precisely because they get a rebate and I pay VAT tax
Because if there is a consensus of perception on EP it is trying to recreate a bubble economy is a really, really bad idea.
You're in the right place of outrage too. (Gulag).
I've thought they should call out the national guard, put a moat, barbed wire around D.C., call it the "no lobbyist zone" and create a "Berlin wall" of no lobbyists, take back the city.
So, you want to deny all U.S. manufacturers the ability to export.
Exports mean out of the country.
So, what do you think will happen to the United States economy and businesses if they are 100% denied to export their goods and services?
China is an import.
That is the reason for the VAT. The WTO has ruled that what the EU, China, India do with their rebates to their manufacturers on VAT is legal. So, one cannot deny the Chinese their VAT practices.
I'm not endorsing the WTO, I'm describing why various economists would be looking at a VAT as a method to level the trade deficit and how the VAT is simply not just a "consumption" tax for these reasons.
Robert,
Try as they might, bankster fronts, Summers, Geithner et al, simply won't get their desired bubble back. The truth seems to stay just ahead of their manipulations, witness the rate spreads earlier this week. And perhaps one of the biggest scams of the last couple of decades, the "get-an-advanced-degree" con designed to support the six-figure lifestyle of professorial academia, would seem about to come apart. One hopes it strikes the law and "journalism" schools the hardest. If we could incarcerate the entire political class and create a gulag for lobbyists, perhaps we could then embark upon a genuine program of reindustrialization. God knows we need such a program. I'm all for dealing decisively with the people at the core of today's problems before we begin to treat the effects, however. There's a right order to these things.
Seebert, I cannot even get you to realize that tariffs would be ruled illegal by the WTO. You want some sort of battery as money.
So, be aware, again, we do not allow Economic fiction on the site.
So, the entire reason various groups are examining a VAT is an alternative to get out of the WTO...since they cannot and the unfair trade agreements are killing their business (and workers).
according to Indian economist Prabhat Patnaik,
It is a great quote, but it is a United Nations pdf file that will not allow me to copy and paste, The Present Crisis and the Way Forward. Which is just as well, because I urge anyone interested to go and read at least the first nine or ten paragraphs. Patnaik explains that what Keynes wanted was not really a stimulus in times of depression, but
Which of course reminds me of what Stirling Newberry wrote a week or two ago in The Depression that Hayek Built in which he writes that over the past three decades:
Dictatorship of the propertariat ! Newberry sure can bang the nail squarely on its head !
And disagree with your interpretation of the WTO's ruling.
Specifically, the WTO ruling was on INDIRECT taxes, not the VAT in particular. There are other forms of indirect taxes we can use to do effectively the same thing, while addressing the trade situation more directly.
One of these is the ITYT- the Intermodal Transfer Yard Tax. I propose we add a tax, at *all* domestic and international ports, of $1/3200 cu ft/mile from originating address on shipping label.
This is an indirect tax (it's assessed by the port as a part of their fees for moving standard cargo containers around, that's why the 3200 cubic feet, a standard 40' cargo container). Because it's on VOLUME instead of WEIGHT, it affects smaller, cheaper items less per item. Because it is on DISTANCE- it encourages and gives a boost to local manufacturers, and hits foreign trade (intercity, interstate, or international) harder than the local business serving local customers with their own trucks that never hit an intermodal transfer yard.
And thus, in the end analysis- it's progressive because it supports local jobs for local communities, which is where progressive is supposed to be at.
More on this once I find a proposed VAT to compare to, and try to figure out why these rebates aren't called what they really are: subsidies.
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
By not exporting and denying the Chinese the ability to rebate money to their manufacturers?
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
And in fact, I'm working on an aggregate analysis in agreement with those papers that proposes an *ALTERNATIVE* to enacting VAT tax here with a tax that is both indirect *and* specifically hitting *trade* (as opposed to hurting small, in-state non-border businessmen).
-------------------------------------
Executive compensation is inversely proportional to morality and ethics.
and we've called for mass demonstrations chanting jobs, jobs, jobs, jobs. But even cooler, we go to the original statistics and look at them instead of just media reports.
The reason "consumer confidence" is a leading economic indicator is the nation's economy is 70% consumer. Of course I think that's absurd and we need to restructure the economy into a production and innovation economy, not just something out of the coneheads.
So, what is most interesting from NDD's post here is how consumer confidence and the actual buying of mass quantities is divergent.
It's not correlated, which as far as I know is new, although I would have to see a graph/stats on sales vs. consumer confidence over time.
On unemployment, you are right they sure spun the beyond belief official unemployment numbers as a sign the recession is peaking or at the peak. On the other hand, unemployment is a lagging economic indicator.
But, the concept of a jobless recovery is also something we are hammering on EP.
Good plug for counterpunch, Paul Craig Roberts.
Consumer sentiment/confidence is reflecting the stock market and Stock market is seeing consumer sentiment/confidence. But the reality is that people are either still deleveraging and are not in a position to spend.
The key here, which I keep trying to pound on, is how other nations give rebates on VAT for all exports. That is the key element and why it is a "tax on imports" de facto even though yes, VAT is across the board. It has to do with the WTO ruling on VAT and how other nations are using their VATs. I've posting this information now 3x in links, in comments.
So, by enabling the US to impose taxes on imports plus give a rebate on domestic goods exported is how it is a trade tool.
It's also not 12% across the board. One can have different treatment per category, different tax levels per category.
Of course it would have to be significant offset in order for it not to be regressive and "yet more taxes" but it's about the only thing the WTO will allow to fly. They will not allow tariffs and ruled against other US taxes which were in essence trying to balance for how other nations give tax rebates (de facto) for their national exports (which I posted a link on).
Anyone paying the least attention to the way in which economic events are interpreted - as opposed to being reported - by our controlled media, readily grasps how the notion of "green shoots" ever had an opportunity in present circumstance of finding its genesis. At Bloomberg, one would find it odd not to encounter a news entry along the lines, "New unemployment claims at 630,000, down 3,000, in sign recession is close to ending". The daily hammering one gets with this kind of oafal eventually leads one to a visceral suspicion of almost anything reported at such sites. The whole thing is cut from the same cloth that fashioned public support for the phony casus belli that became war with Iraq and is now threatening to become the same with Iran. Next they'll be pulling some poor, unsuspecting, dark complected schlub out of an apartment in Jersey City, and waterboard him into "confessing" involvement in a conspiracy to place an Iranian neutron bomb in the cellars of the Chrysler Building. And AIPAC Stephin Fetchit, Barak Obama, will be soiling his pants in his haste to commit unheard of levels of new troops to the the Iraqi border with Iran so as to defend "American interests".
If you're looking for a little truth in reporting on the economy, read Michael Hudson, Mike Whitney and Paul Craig Roberts over at CounterPunch. Maybe you'll get angry enough to join the mass demonstations when unemployment - even as it is presently calculated - tops 12%.
... to address this:
There is no such thing as "a VAT on imports". There is a VAT, which applies to all sales that are not exempt, and so it applies to imports as well.
The name for a "tax placed on imports" is "tariff". So addressing the fact that production in the US has a 12%+ flat rate income tax imposed on all labor under $100,000 per year while the import has been exported tax free would be a 12% across the board non-discriminatory tariff on the product.
Its specific discriminatory tariffs that are regulated by the WTO. A non-discriminatory tariff is allowed for a country in serious deep water on its current account, like the US, and is much simpler to put in place than a VAT.
The current system is the problem. But entrenched systems are not changed by intellectual critique, they are changed by knitting together a progressive change coalition that is able to grab enough power to change the system.
And coming up with policies that are improvements that can serve as some of the threads binding the coalition together is even harder than coming up with some idealized notion of "the best" policies. Compromising in the interests of a "large enough" coalition without compromising so much that nothing is accomplished ... there is no optimum there. Its a balancing act consisting of a series of strategic choices.
What was in use was the oversimplified hydraulic "Keynesian" economics of Samuelson ... the part that survived the ultimately failed effort to place bit and pieces of the General Theory on neoclassical economic foundations, despite the fact that the General Theory indicated that neoclassical economics is radically incomplete.
But Samuelsonian theories were no more "Keynesian" by virtue of their trademark than Fox News is "Fair and Balanced" by virtue of its trademark. Treating the General Theory as debunked by policies that ignored the majority of the General Theory is like treating "Fairness" as debunked by actions of Fox News.
Indeed, all of the parts of the General Theory that would have guided policy to prevent the financial collapse we just experienced had to be left out when the General Theory was neutered to make it less incompatible with neoclassical economics, because the General Theory was founded upon the observation that there is fundamental, intrinsic uncertainty in the world, and fundamental, intrinsic uncertainty simply cannot be included within the type of model pursued in mainstream economic theory.
Government deficit spending is quite patently not what got us into this mess, since part of the time we were creating this mess, we had budget surpluses. It was far more our tolerance of national deficit spending in the guise of the unsustainable current account deficit of Clinton/Bush that got us into this mess.
People that believe in simple minded theories that all budget deficit spending is good in a recession are like those that believe in simple minded theories that the expansion of less than 5% of the money supply in the face of a decline in the other 95% is going to automatically translate into inflation ... simple minded theories are never reliable. Sometimes something happens that fits the theory, which is taken as confirmation, saved and pointed to time and time again, and events that do not fit the simple minded theory are simply ignored.
Now if only a major portion of the USA could understand what the government is doing to us (oops better stay Orwellian) What the government is doing for us.
There are just so many, many, many people that will just tip their hat to the elected whiz kids and allow them to do what ever they want to do.
I am in a blue mood for our economic health in the near term. In this case near term equates to years. This current Congress has created more debt than the total of all of the previous Congresses since the beginning of the Republic. How long can they keep these plates spinning?
I like the cattle farm analogy. Too many businesses look at employees as liabilities (as do modern accounting methods). If dairy farms looked at cattle that way, they would end up selling all of their cows and go out of business. One of the things that made the US great was the idea of employees making companies better. Employees are assets to a company, not liabilities. When companies and the government start realizing this, they will grow stronger and the economy will improve.
To clarify, all of the infrastructure spending is dead on, although I question if the best projects are/will be selected. Why I rail against the Stimulus itself is the tax cuts and more importantly how the money is going offshore and assisting in sending jobs offshore. I believe the projected jobs were 25% I.T. and IBM is grabbing those contracts, all the while they are offshore outsourcing them.
Same problem with other aspects of these projects and that defies Keynes for it was supposed to be domestic income exclusively.
That would make yet another nice post, just how wise some of the infrastructure projects which have enabled major commerce have happened throughout U.S. history, esp. in the 1930's etc. I mean right now cities and states are busy selling and leasing these things to foreign nations and private sector.
You are correct about the causes of the stagflation. That is separate from Keynesian theory. The problem with Keynsianism is that his theories didn't account for stagflation at all.
In a Keynsian world stagflation didn't exist. His theories said that inflation and growth went hand in hand. Deflation and recession went hand in hand.
But recession and inflation were mutually exclusive in Keynsianism.
That's a simplified version of it. Hopefully someone else can expand on it.
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