As IF Times

link http://www.ibtimes.com/articles/205126/20110828/global-warming-climate-change-fears-concern-decline-developed-nations-rise-developing-nations-poll-s.htm

This is what happens when you spend too much time watching the adventures of Snookie and The Situation; you lose track of the  things that are really important to other citizens of the world.  According to this article, the consciousness of global warming remains high on the minds of people in less developed countries despite a slight decline over the past few years.  Apparently in places like Japan, New Zealand, South Africa and Singapore, citizens collectively fret about their carbon footprints on their daily commutes to their workplaces.  It remains the hot topic of cocktail conversations and that awareness is woven into every aspect of daily life.

Just the other day, while sitting in a bar, my friend pointed to an attractive gal across the room and mused, ” I wonder what her views are on sustainability of our fragile ecosystem”.  No doubt this scenario plays out hundreds of thousands of times every day in the world as people push aside their more pedestrian worries of mortgages, the quest for perfect abs and the best chai latte.  To be sure, this only happens in the enlightened enclaves of the world, or those that get CNN.  In other parts of the far flung planet, there are countless millions still living in ignorance of the impending catastrophe that’s looming just over the horizon.  They are still blissfully unaware of this and continue to pursue nonsensical things such as looking for food and staying alive.

This is perhaps a bit unfair, since many have been practising ‘earth friendly’ lifestyles long before Al Gore brought earth awareness to our collective consciousness.  In the Amazonian rain-forest for example, the residents there have eschewed modern frivolities such as True Religion Jeans or Columbia goretex sportswear, instead relying on the tried and true, environmentally friendly, loincloth.  Rather than waste money on things such as guns and bullets, their hunting and warfare is conducted using the eco-friendly blow tube.  This is much more sensible since any conflicts between tribes is considerably less bloody, less noisy and with almost no cases of misfiring weapons.

In China, to avoid the profligate use of resources observed in the west, it is common to see generations of families thoughtfully living in one simple house of only a few hundred square feet to reduce their carbon footprint.   Eschewing the family SUV, there is instead the family bicycle.  This is somewhat inconvenient when dropping the kids off at school, but they get used to it.  Their consumer habits are much more eco friendly as well.  For example, instead of owning iPads which consume electricity, they prefer to just go down to the community bulletin board where they can keep up on the Kardashians.   It’s not all perfect of course.  While their diet consists mainly of grains and vegetables, they do eat the occasional bear.  When chastised about this, the Chinese respond, ” If we aren’t supposed to eat them, why are they so delicious?”  Oh well, enlightenment will come eventually.

link Laura Ingraham and Ben Stein Debate Raising Taxes on Rich – Interviews – The OReilly Factor – FoxNews.com.

When you absorb as much business news as I do, you are exposed to a wide spectrum of opinions on any given issue.  Of course these days, all business news has an element of political news and it’s a very rare pundit that doesn’t mix one completely with the other.  In the case of economists, for all of the sobriety that seems inherent in their profession, there is always at least the element of humor in their presentations, intended or otherwise.  When the chief economist for Brokerage firm A pronounces that growth will be 2.1% vs the earlier forecast of 2.3%, that’s big news and can frequently spark millions of dollars of securities trades just because of that 0.2% difference.  You’d think that these numbers were proclaimed by guys sporting robes and sandals reading from tablets; the stone kind, not the IPad kind.

In order to create some interest in the aptly named ‘dismal science’, some TV networks interview people who exude some kind of personality, as if that would make the pronouncements more believable.  Fox for example regularly brings on Ben Stein, he of the dry  persona made famous by his role in the 80’s movie, Ferrris Buehler’s Day Off.  Think of his deadpan delivery of, ‘Buehler, Buehler, Buehler’.   Apart from being a character actor, Stein is also in reality, an economist, one that is acclaimed enough to merit being interviewed on various talk shows.  I won’t quibble over the complex models that these guys use to come up with a result of 2.1% vs 2.3%, after all, somebody believes it.  What I do have issue with is the very basic premise of economics that all economists should have learned in their first year in school.

While there are really no laws in economics, unlike for instance the law of gravity in physics, certain tenets must pass the smell test of common sense.  In particular, unless they’ve changed the entire premise of economic theory, demand responds to supply and price is a function of scarcity.  In the interview on Fox, Stein is pushing some economic heresy that even a kid running a lemonade stand would laugh at.  His premise is that tax rates should be increased significantly on the ‘rich’ so as to contribute to the federal deficit, since, according to him, during the ’40’s , ’50’s and ’60’s, tax rates were higher and the US economy had no trouble growing.  Like Warren Buffet before him, Stein thinks that tax rates on the ‘rich’ should approach 90%.  The rich can afford it and the economy can still grow.

This is as logical as the idea that a restaurant can keep hiking prices because they’ll just keep on making more money.   What Stein does not mention in his astute analysis is that the period mentioned happened to be the largest economic expansion in the history of the world in the aftermath of World War 2.  There was demand for everything in the world since everything was destroyed and the US was in the unique position of being the only functional industrial economy.  Taxes may have been high, but the economy was expanding at a scale that had never been seen before.  The bulk of the workforce was young and contributing to growth.  We did not yet have the pull of entitlements on the economy anywhere near the degree that we do now.  Great fortunes were made and great corporations built.

If Stein’s premise is correct, why don’t we just pay everyone a flat income and and tax the rest away?  In addition, running a business will be easy, just set the prices as high as you want, since that must mean more income, not that you’d be able to keep it.   Maybe we’re all being conned here.  Maybe Stein is actually an actor posing as an economist.  That makes more sense.