Prometheus Unchained, What Happens When You Let The Free Market Work

The economy is going strong, job creation and growth are gangbusters, and the American people are actually starting to get back to our historic optimism about the future. A very well founded optimism, we knew the future would be better because we would make it better and be free to do so. While most of the media may not be willing to recognize let alone give credit to the President and his roll back of business regulations the financial media, not having the privilege of such extreme rectal cranial inversion has begun to recognize and report on the phenomena.

Less regulation is one campaign promise made by the president that is coming true.

Reducing government regulation is tough. It’s resisted by all those who benefit, including government employees who administer the many programs. Every president since Jimmy Carter has attempted to lower the cost of regulation. At best, any cuts have been tiny and mostly centered on trimming paperwork. But less regulation is one campaign promise made by Donald Trump that is coming true. With tax and health-care reform problematic and given the president’s protectionist leanings, deregulation is probably a major driver of the stock market rally.

The size and scope of the federal government give the president immense powers. In relation to gross domestic product, federal spending rose from 16 percent in 1946 to 22 percent in the 2017 fiscal year. Executive orders give the chief executive, in effect, legislative powers. President Barack Obama issued many in his waning days, especially affecting power plants and oil pipelines. The Competitive Enterprise Institute last year found regulation cost American businesses $1.9 trillion, dwarfing the $344 billion in corporate taxes. About 56 percent of CEOs see overregulation as a major threat to their organization, more than cybersecurity (50 percent), rising taxes (41 percent) or even protectionism (27 percent).

Whenever a new regulation is made or changed, it must be chronicled in the Federal Register. In the last years of the Obama administration, regulatory activity went parabolic, hitting almost 97,000 pages in a year. The annualized pace under Trump through July 31 was 61,330 pages, the fewest since the 1970s. This year through June, the federal government had made 1,731 preliminary, proposed or final rules, the least since 2000 and down 40 percent from the 2011 peak under Obama. Many actions taken under Trump are reversals of earlier rules made under Obama. Of 66 completed actions at the Environmental Protection Agency, a third were rule withdrawals.

–Bloomberg

Frankly this has been one of the things that has had me ecstatic about the Trump administration.  There was absolutely no way a story like this could have been written with any machine Democrat in the office, let alone a president Clinton. It was worrying to see someone who was being labeled a lifelong Democrat take the office, but despite the naysayers we have been getting a tide of conservatism from his presidency in the executive and the judiciary.

Philadelphia Being Taught An Economics Lesson The Hard Way

The “reality/science” based party really seems to not like the science of economics, and biology, statistics, math in general, psychology when it’s producing actual testable predictions as well but those are all topics for another time, today’s is about how they blithely ignore economics when it predicts things they don’t like. Witness the City Of Philadelphia  conducting an experiment and getting a very negative result.

Monthly revenue collected by the city’s beverage tax in October was the lowest amount since January, bringing in $6.1 million for Philadelphia’s expanded preK, ReBuild and other programs, according to preliminary figures provided by the city.

That’s $1 million less than the Philadelphia Beverage Tax drew in September and puts October’s monthly revenue for the controversial tax only ahead of January’s figure of $5.9 million.

October’s $6.1 million in PBT revenue pushes year-to-date collections to $66.2 million.

The latest figure will likely add more fuel to the the Ax the Bev Tax coalition’s opposition campaign. The group has repeatedly cited the monthly revenue numbers as evidence the tax is unsustainable, saying the so-called soda tax will be unable to bring in the projected $92 million in yearly revenue since it has yet to hit $7.7 million in a single month. Seasonal fluctuations are one reason city officials have cited to counter those claims.

For soda tax revenue to reach the yearly estimate in its first year of implementation, it would need to draw another $25.8 million in November and December, meaning each month would need to generate more than double October’s revenue.

–Philadelphia Business Journal

Just to fill in some of the details the beverage tax is 1.5 cents/ounce of soda or 24 cents on a 16 ounce can,  96 cents on a half gallon bottle. If you look at those numbers and think that’s ridiculous and is a blatant misuse of power by a city government you might just be a conservative. If you thought that doubling the cost of sodas would drive people to buy them elsewhere, you might just be a conservative and business person, possibly an economist. People going elsewhere to buy their soda, is exactly what happened, and tax revenues are actually down, and business in the sector is being hit hard. Only question is, were the city fathers criminally stupid, or deliberately malfeasant.

Quote of the Day:

A major source of objection to a free economy is precisely that it… gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself

–Milton Friedman

Drink up That’s it for the Watercooler today. As always it’s an open thread