Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Donald Trump leads off with China's currency manipulation in his CPAC speech yesterday
Howard Richman, 3/7/2014
Here's his March 6 speech
Trump was referring to the recent action by the People's Bank of China which brought the yuan down from 16.38 cents on February 5 to 16.31 cents on March 1. You can see graphs of the yuan-dollar exchange rate at the following website:...
Climategate: Revolt of the Physicists -- Revisited
Howard Richman, 3/4/2014
With Niagara Falls close to freezing, I thought it might be a good time to look back at my Nobember 30, 2009 commentary (Climategate: Revolt of the Physicists) on the Seeking Alpha website:
Climate science seemed settled in the 1990s. The only theory around was that the increase in CO2 and other greenhouse gases was causing the increase in world temperatures. But then physicists got involved. My guess is that the average physicist has an IQ of somewhere between 150 and 200. The progress that they have been making is incredible.
If you have a scientific background and you still believe in man-made global warming, get out a cup of coffee, a cup of tea, or a glass of brandy, whatever helps you think best, and watch the following lecture from the Cern, one of Europe's most highly respected centers for scientific research:...
Don't miss Confessions of a Greenpeace Dropout on the Watt's Up with That Blog today
Howard Richman, 2/27/2014
Don't miss Confessions of a Greenpeace Dropout on the Watt's Up with That Blog today. It's got humor and wisdom.
It starts by showing how Greenpeace founder Dr. Patrick Moore has been written out of Greenpeace history -- much as Stalin wrote out his fellow Bolshevik leaders. Then it goes on to some very wise testimony by Moore to the Senate about climate change. Here's how his testimony begins:
Public Citizen's Fact-Check of Obama Administration Claims about TPP
Jesse Richman, 2/21/2014
Public Citizen's Eyes on Trade blog recently posted an excellent fact-check on claims made by the Obama administration about its trade policy. It's a good read.
U.S. Trade Representative Michael Froman tried in a speech yesterday to defend the Obama administration’s beleaguered trade policy agenda: the controversial Trans-Pacific Partnership (TPP) and Trans-Atlantic Free Trade Agreement (TAFTA) pacts and an unpopular push to Fast Track those sweeping deals through Congress. The list of those publicly opposing the Fast Track push includes most House Democrats, a sizeable bloc of House Republicans, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid, and 62% of the U.S. voting public.
In attempt to justify the administration’s polemical pacts, Froman resorted to some statements of dubious veracity, ranging from half-truths to outright mistruths. To set the record straight, here are the top 10 Froman fables...
Hospital layoffs continuing
Howard Richman, 2/16/2014
Health care has been a booming field. With baby-boomers aging, the demand for health care has been increasing. Young people who wanted to find a sure-fire job have been going into nursing and other medical disciplines knowing that the market for healthcare workers was growing. But that market suddenly changed in December due to the onset of Obamacare.
In order to hold down the costs of Obamacare, government administrators are placing price ceilings on government healthcare payments. Also, some healthcare consumers, facing higher costs for insurance, are cutting back on their elective procedures.
As a result of these two factors, hospitals are being forced to cut back on the services that they offer and are laying off workers. The result will be fewer hospitals and clinics and fewer services offered by the remaining hospitals and clinics. As healthcare supply decreases, customers will increasingly encounter long waiting times and other forms of healthcare rationing.
The last two monthly employment reports from the Bureau of Labor Statistics confirm that the new trend began shortly before I first spotted it in the December 20th American Thinker (Jobless Claims Up). After going up month after month, hospital jobs started declining in December from 4,797,500 in November to 4,792,800 in December to 4,788,300 in January (on a seasonally-adjusted basis).
An article in a Nevada newspaper explains why these layoffs are occurring (Problematic hospital funding leads to layoffs, reconsiderations):...
Voters not Sold on Fast Track
Jesse Richman, 2/12/2014
A new poll on trade policy preferences concerning Fast Track was recently released. Overall these results are resoundingly consistent with previous surveys. Public support for policies that continue to promote imbalanced "free" trade has been and remains very low. Public support for granting the president authority to pursue a fast track to a bad deal is also very low.
There is some interesting material in the poll. In particular, Republican rhetoric against Obama's assertion of unilateral presidential authority appears to be deepening Republican voters' opposition to granting the president Fast Track authority. The numbers are quite striking. Republican members of the House should clearly think twice and three times, and check if they have a primary challenger, before voting for Fast Track.
Republicans and conservatives especially believe that fast-track authority gives the president too much power. Among Republicans, 87% find the argument that fast track gives the president too much power a very or fairly convincing reason to oppose fast-track authority (85% among conservatives). Similarly, 61% of Republicans say their single greatest concern about Congress giving the president fast-track authority is that it would give the president too much power (64% among conservatives).
Overall the poll finds much more opposition than support. 62 percent of respondents oppose granting fast track authority versus 28 percent who favor granting that authority.
Voters highest priorities for trade deals are preventing U.S. jobs from moving overseas (49 percent including 55 percent of Republicans) and preventing unfair competition that lowers workers wages....
How to Reduce Inequality of Income and Wealth
Raymond Richman, 2/11/2014
The inequality of income has been raised as a political issue but neither the Democrats nor the Republicans have proposed anything resembling a reasonable policy to reduce it. The Dems would raise the rates of the personal income tax and increase entitlements while the Republicans argue that lower taxes would create more equality by helping achieving full employment. Both are partly right. But both overlook the fact that much of the income of the very wealthy is not really taxed at all. You would not suspect that the principal reason there are so many millionaires and billionaires is, believe it or not, the Corporate Income Tax.
And the solution is simple, treat corporate income as we treat partnership income. Partners report their share of partnership profits as personal income. There is no separate partnership income tax as there is for corporations. Corporate shareholders should report their share of corporate profits as personal income. Small corporations, so-called S corporations are now permitted to elect to have their earnings treated as the personal income of their shareholders. What we propose is that shareholders of all corporations treat their shares of corporate income as personal income for tax purposes. ...
Terrence P. Stewart calls for balanced trade in Senate testimony
Howard Richman, 2/4/2014
Terence P. Stewart of the Washington-based international law firm Stewart and Stewart called for balanced trade agreements in written testimony to the Senate Finance Committee. I have not yet read his testimony, but I did read his law firm's press release about it.
The title of the press release cites a disturbing fact: "United States Transforms from a Nation with Balanced Trade to a Country that Imports Approximately 50 Percent More than it Exports." The press release elaborates:
“The reality is that the past 40 years have expanded trade but at the direct cost to Americans of millions of manufacturing jobs,” Stewart wrote. “Indeed, using U.S. Department of Commerce figures … the trade deficit in 2013 cost the United States over 3.75 million jobs in that year alone.”
The press release recommends the following provisions to balanced trade:...
Pat Buchanan ties together GOP establishment's immigration and trade policies
Howard Richman, 2/3/2014
In a commentary last week (How the GOP Lost Middle America), Pat Buchanan ties together the Republican establishment's positions on immigration and trade. He wrote:
To understand why and how the Republican Party lost Middle America, and faces demographic death, we need to go back to Bush I.
At the Cold War’s end, the GOP reached a fork in the road. The determination of Middle Americans to preserve the country they grew up in, suddenly collided with the profit motive of Corporate America....
How the Corporate Income Tax Contributes to Income Inequality
Raymond Richman, 1/28/2014
The growing number of millionaires and billionaires and the increase in the inequality of income has being raised as a political issue by Pres. Obama. But his policies and those of his “liberal constituencies have helped exacerbate income inequality. One of the reasons there are so many millionaires and billionaires is the corporate income tax, which turns out on analysis to exclude corporate income from any tax at all. As the readers of this site are aware, we have been campaigning for the integration of the corporate and personal income taxes, essentially to treat corporations as we treat partnerships. Partners report their share of partnership profits as personal income. There is no separate partnership income tax as there is for corporations.
Not only is the corporate income tax a very bad tax from an economic point of view, economists are not even in agreement that the shareholders bear the burden of the tax. Some believe that the tax is passed on to consumers and that little if any of the burden of the tax is borne by shareholders. To make matters worse, corporations that export are disadvantaged compared to those that produce for the domestic market. In international markets, the likelihood of passing the tax on to consumers is practically nil because their competitors may pay little or no corporate income tax. Value-added and sales taxes may be rebated to exporters but income taxes cannot be rebated under international law.
Environment America: Global Warming Threatens Super Bowl Teams!
Howard Richman, 1/25/2014
Wow! Was Environment America right or not when it predicted that global warming would affect the Super Bowl? In a February 2, 2008, column New York Times columnist John Tierney criticized Environment America's prediction that global warming would have a significant effect upon the Super Bowl (Global Warming Threatens Super Bowl Teams!):...
Fast Track to a Bad Deal -- we're published in American Thinker this morning
Howard Richman, 1/22/2014
Here's a selection:
In their press release, the sponsors all claimed that TPA would increase jobs by boosting exports:
• Democratic Senator Max Baucus: "TPA legislation is critical to a successful trade agenda. It is critical to boosting U.S. exports and creating jobs. And it's critical to fueling America's growing economy."
• Republican Senator Orrin Hatch: "TPA will help advance a robust trade agenda that will help American businesses, workers, farmers and ranchers by giving them greater access to overseas markets..."
• Republican Representative Dave Camp: "The Bipartisan Congressional Trade Priorities Act will give us the tools we need to move more job-creating trade agreements..."
The following graph illustrates their fallacy. It shows that even though U.S. exports, as a percentage of GDP, have been increasing in recent decades, economic growth (per capita real GDP) has been slowing, a decline paralleled by declining net exports (exports minus imports) as a percentage of GDP.
To read the article, to to:
Rising Initial Unemployment Insurance Claims Bodes an Economic Downturn
Raymond Richman, 1/20/2014
Once again, there are grounds for concern that we are experiencing a downturn in economic activity and may headed for an Obama recession. The advance number of actual number of initial claims totaled 534,431 during the week ending January 11, 2014 an increase of 51,190 over the previous week. During the preceding week ending January 4, 2014, an increase in initial claims of 34,384 was reported and in the week ending December 28, 2013, an increase of 25,875 was reported. This increase in the number of claims was not reported in the media.
The media reported the BLS “seasonally adjusted” estimated of initial claims which reported a decrease of 2,000 in the number of initial claims. We consider the seasonally adjusted figure as unreliable. For weekly data, there is no good reason for a seasonal adjustment. But that is what the BLSs reports and the media publish. We consider that to be a great disservice to the community.
In the last few months, one sees a steady deterioration in the employment data. Starting from a relatively good showing of 229,485 to 255,110 initial claims in September, one observes a range of 311,516 to 368,832 in October and November, and, with the exception of the week of 12-28-2013 when 397,667 was reported, a range of 414,002 to 534,431 in December, 2013 and January, 2014. The trend is unmistakable and does not bode well for the future of the economy. Following are the data:
Rep. Alan West says no to fast track
Howard Richman, 1/16/2014
Rep. Alan West who was redistricted out of his Florida Congressional speech by his fellow Republicans is fighting the Republican establishment on giving Obama Fast Track Trade Authority. He makes some good points. The whole article is worth reading. Here's a selection as it appeared at TradeReform.org after being reposted from Brietbart:
All trade agreements come with predictions of new jobs for Americans, but those promises are always empty. Obama said our free-trade deal with Korea would be a major job creator, but after it went into effect, sales of U.S. goods fell and imports from Korea rose. When you hear someone say TPP will create jobs, hold on to your wallet....
Gem of a column on Keynes plans for balance of trade
Jesse Richman, 1/11/2014
It's a few years old, but I just stumbled upon it.
Poor old Lord Keynes. The world’s press has spent the past week blackening his name. Not intentionally: most of the dunderheads reporting the G20 summit which took place over the weekend really do believe that he proposed and founded the International Monetary Fund. It’s one of those stories that passes unchecked from one journalist to another.
The truth is more interesting. At the Bretton Woods conference in 1944, John Maynard Keynes put forward a much better idea. After it was thrown out, Geoffrey Crowther – then the editor of the Economist magazine – warned that “Lord Keynes was right … the world will bitterly regret the fact that his arguments were rejected.”(1) But the world does not regret it, for almost everyone – the Economist included – has forgotten what he proposed.
One of the reasons for financial crises is the imbalance of trade between nations. Countries accumulate debt partly as a result of sustaining a trade deficit. They can easily become trapped in a vicious spiral: the bigger their debt, the harder it is to generate a trade surplus. International debt wrecks people’s development, trashes the environment and threatens the global system with periodic crises.
The entire column is worth reading. It can be read at: http://www.monbiot.com/2008/11/18/clearing-up-this-mess/
Initial Claims for Unemployment Insurance Are a Wake Up Call Again
Raymond Richman, 1/10/2014
In the week ending January 4, the advance figure for seasonally adjusted initial claims reported by the Department of Labor was 330,000, a decrease of 15,000 from the previous week's revised figure of 345,000. But the actual number of initial claims totaled 486,033 an increase of 34,384. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,295,112, an increase of 451,828 from the preceding week. We consider this a negative report and reinforces our conclusion last week that the economy may be slowing. While it is too soon to cry wolf, the optimism of spokesmen for the Federal Reserve and the administration and others appears to us to be wholly unjustified. ...
Is the sun causing the cold snap?
Howard Richman, 1/7/2014
The current cold snap in the northern hemisphere is being attributed to a polar vortex, which means:
A slowing in the jet stream has caused it to zigzag, carrying warmer temperatures farther north than usual—and Arctic cold farther south. “The real story,” Francis [a research professor at Rutgers University] says, is that the jet stream is “taking these big swings north and south and that’s causing unusual weather to occur in a number of places around the Northern Hemisphere.”
But that explanation ignores the global warmers' ship that was stuck in the Antarctic ice, which is in the southern hemisphere, suggesting that the shift in wind patterns is affecting both hemispheres.
One weather forecaster has an explanation that could explain the worldwide pattern. Astrophysicist Piers Corbyn predicts the world's wind patterns based upon what happened when the same solar activity/lunar position patterns occurred in the past. He makes his living at weatheraction.com from people who pay for his forecasts.
In this case, he attributes the current world weather system largely to a coronal hole in the sun turning toward the earth. Here is a current image of the sun, showing the coronal hole, as it appears on his website:
This hole will be fully facing the earth on January 10....
Turkey in free fall
Howard Richman, 1/5/2014
Spengler (David P. Goldman) is one of the few commentators on the world scene who understands trade surpluses and deficits. I look forward to his postings. On December 27, he reported on his blog that Turkey is in free fall:
Turkey is coming apart. The Islamist coalition that crushed the secular military and political establishment–between Tayip Erdogan’s ruling AK Party and the Islamist movement around Fethullah Gulen–has cracked. The Gulenists, who predominate in the security forces, have arrested the sons of top government ministers for helping Iran to launder money and circumvent sanctions, and ten members of Erdogan’s cabinet have resigned. Turkey’s currency is in free fall, and that’s just the beginning of the country’s troubles: about two-fifths of corporate debt is in foreign currencies, so the cost of servicing it jumps whenever the Turkish lira declines. Turkish stocks have crashed (and were down another 5% in dollar terms in early trading Friday).
Don't believe the rosy reports for world prosperity in 2014. On November 24 I explained why world economic growth is actually slowing. I pointed to an OECD report which said:...
Are We About to Experience the Obama Recession?
Raymond Richman, 1/2/2014
In the week ending December 28, 2013, the advance number of actual initial claims for unemployment insurance, unadjusted, totaled 443,513, an increase of 25,875 from the previous week. The Department of Labor and the media reported a “seasonally adjusted” decrease of 2,000 and 399,000 claims. As we have reported in this site a number of times, we know no reason for a seasonal adjustment of weekly data. The actual number of claims totaled was over 100,000 more than the “seasonally adjusted” figure and is a cause for alarm. It is a harbinger of bad economic news.
Taking into consideration 1) that the Gross Domestic Product increase reported in the fourth quarter showed a big increase in inventories that will have to be reduced in the following quarter, the usual means for making the reduction being to reduce production, plus 2) the huge burden that Obamacare will impose on the middle class–the huge increase in monthly health costs imposed by Obamacare is equivalent to a huge increase in income taxes on the middle class, 3) the prospect that the Federal Reserve Board will reduce the rate of money creation (called "tapering", and 4) an expected bursting of the stock market bubble generated by the Fed’s keeping interest rates at an artificially low level, it is not unreasonable to expect a serious economic shock to the economy, not unreasonable to expect another recession. ...
Jobless Claims Up -- Ray and I were published on the American Thinker blog this morning
Howard Richman, 12/20/2013
We discuss the rising Jobless Claims numbers and the reports of hospital layoffs and conclude:
If ObamaCare is driving the layoffs and a decline in consumer spending, then it may turn out, once all the statistics are in, that an ObamaCare recession began at the beginning of December.
To read the posting, go to:
Why are we letting China buy American Companies?
Howard Richman, 12/17/2013
Tradereform.org notes that the New York Post featured an excellent commentary by Diane Francis on December 15 entitled Why are we letting China buy American Companies?. It's about a Chinese company's purchase of U.S. pork producer Smithfield Foods of Virginia. Francis predicts the following:
Smithfield has become the branch plant of its new proprietor — a holding company called Shuanghai International Holdings Limited, the biggest meat processor in China. But the ultimate beneficial owner is the Chinese government, and Shuanghai answers to the politics, policies and edicts of Beijing. This is the nature of “China Inc.”
The Smithfield buyout is a great loss because the company has become a huge exporter, to Japan and elsewhere, and has developed, with taxpayer assistance, systems and technologies that are best in class....
The damage includes the fact that Smithfield’s technology, research and development and patents will be transferred to the Chinese parent company. Smithfield will be hollowed out and the head office will be moved to China. Talent will leave.
Francis' concern about the loss of American technology is valid and important. And there is another important concern....
The Media Silence on the Explosion in Unemployment Insurance Claims
Raymond Richman, 12/14/2013
In the week ending December 7, the advance figure for seasonally adjusted initial claims was 368,000, an increase of 68,000 from the previous week's revised figure of 300,000. The advance number of actual initial claims unadjusted, totaled 461,422 in the week ending December 7, an increase of 146,241 from the previous week. The 461,422 figure is consistent with an economic downturn.
Regular readers of this blog know that we believe the number of unemployment insurance claims filed is one of the most important indicators of economic activity and is the most up-to-date of any of the important indicators. Going into the recession of 2008-09, both the seasonally-adjusted and unadjusted figures were under 400,000 until July, 2008. They rose consistently throughout the remainder of 2008 and 2009, reaching numbers of 600,000+ in January, 2009. ...
Mixed Trade Report for October
Howard Richman, 12/4/2013
According to statistics just released by the Commerce Department, U.S. net exports improved slightly in October, though the three month trend is still downward. The best news is that net U.S. goods exports to China increased by $605 million for the year ending in October to a negative $320,419 million from a negative $321,024 million for the year ending in September.
A careful examination of the graph below shows that U.S. net goods exports to China stopped going down in 2013, after declining steadily throughout 2010, 2011 and 2012.
World Economic Growth is Slowing -- we were published in today's American Thinker
Howard Richman, 11/29/2013
When gas prices start declining at the pump, as they have this fall, that sometimes means that the world economy is slowing. When U.S. exports decline, as they did in September, that sometimes means that the world economy is slowing.
The latest indication of a slowing world economy comes from a November 19 report from the OECD (Organization for Economic Cooperation and Development), Europe's leading economic analytical agency that tracks world economic data. It predicts that, by the time growth is calculated for 2013, world economic growth will increase just 2.7%, down from a 3.1% increase last year. There appears to be a consistent trend of declining world economic growth:
To read the rest, go to:
The economic case against Obamacare -- Ray was published in Saturday's Pittsburgh Tribune-Review
Howard Richman, 11/26/2013
ObamaCare is a classic case of a misguided and badly implemented government program. It restricts freedom of choice and imposes a series of bad new taxes. While taxes are needed to subsidize those ObamaCare participants who do not pay the full cost of their ObamaCare insurance, the selected taxes violate the accepted principles of taxation in every instance. Moreover, the law mandates coverages that increase the cost to those who do not want those coverages.
Not a single Republican voted for ObamaCare. Obviously, the Democrats, who controlled both houses of the Congress at the time, did not need or even want any Republican support for it. They wanted full credit for it. They're now getting it.
From an economist's point of view, the major defects of the law are:
To read the rest, go to:
People's Bank of China announces plans to reduce future currency manipulations
Howard Richman, 11/25/2013
I missed this article which appeared in Bloomberg on November 20:
The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.
China’s foreign-exchange reserves surged $166 billion in the third quarter to a record $3.66 trillion, more than triple those of any other country and bigger than the gross domestic product of Germany, Europe’s largest economy.
If the People's Bank of China follows through, then the following will happen in the United States:...