Chinese Economic Policy, Part II: Inequality, Poverty, and Income
International Liberty
by Dan Mitchell
2d ago
I wrote yesterday that I’m in China this week, teaching at Northeastern University in Shenyang. This gives me a good excuse to write a series of columns about Chinese economic policy. Our first entry was about demographics, which is a challenge in China (as well as in the U.S., Europe, and elsewhere). Today, let’s look at what China can teach us about inequality, and we’ll start with this chart from the folks at Oxford who run Our World in Data. As you can see, the richest 1 percent of the population in China now earn a much bigger share of national income. Our friends on the left tell us tha ..read more
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Chinese Economic Policy, Part I: The Demographic Challenge
International Liberty
by Dan Mitchell
3d ago
I’m in China this week, teaching about fiscal policy, convergence theory, and inequality at Northeastern University in Shenyang. So it’s a good opportunity to write about some pluses and minuses of Chinese economic policy. We’ll start this series by looking at demographics, which almost surely is the biggest long-run challenge for Chinese policymakers. How big a challenge? Check out these three charts from a recent report in the Wall Street Journal by Liyan Qi and Ming Li. In 1980, China had a relatively normal population pyramid. But over the next four decades, people started livin ..read more
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Libertarian Humor
International Liberty
by Dan Mitchell
4d ago
Our first column of libertarian humor for 2024 was published in April, so today’s column will feature five new items for our collection. We’ll start with a libertarian student and a confused teacher. Hopefully ever-expanding school choice will lead to wiser teachers. Next, we have a Seinfeld meme that captures the libertarian hostility to being governed. Our third item captures a difference between libertarians and conservatives. Conservatives tend to be very upset when private companies (Google, Facebook, etc) act as censors, while libertarians only get agitated when government tries to ban ..read more
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Biden’s Desperate Vote-Buying Proposal for Nationwide Rent Control
International Liberty
by Dan Mitchell
5d ago
I’m not a political pundit, but I’m guessing that yesterday’s despicable assassination attempt on Donald Trump increases the likelihood that he reclaims the White House. That’s probably not good news for trade policy (though Biden has been just as bad), but it will be very good news for housing policy. Not because of what Trump plans to do, but rather because it would eliminate the risk of Biden imposing nationwide rent control. I’ve written previously on this issue, mostly to explain why it’s an insanely stupid idea. Indeed, when writing about rent control in the past, I’ve used words like “h ..read more
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Bidenomics Delusion from the Media
International Liberty
by Dan Mitchell
6d ago
Bidenomics has been a failure, as measured by variables such as poverty, subsidies, inflation, protectionism, household income, fiscal policy, red tape, and employment. But if asked to pick the most important problem for Biden (both politically and economically), my answer would be inflation-adjusted income. Simply stated, American families are on a treadmill, struggling to have their incomes keep pace with inflation. As illustrated by the chart, they have not been winning that contest. But that isn’t stopping the supposed referees in the press from declaring victory for the president. I wrote ..read more
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Dictators Hate Financial Privacy
International Liberty
by Dan Mitchell
1w ago
Earlier this year, I began a column about anti-money laundering laws with four observations. As a libertarian, I don’t like that the government forces banks to spy on customers. As an economist, I don’t like that these laws don’t come close to passing a cost-benefit test. As a citizen, I don’t like that AML policies divert law enforcement from fighting crime. As a humanitarian, I don’t like the way poor people are disproportionately hurt. I now want to confess that I committed a sin of omission. I should have included a fifth point. As a believer in d ..read more
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Greedy Politicians Drive Away Star Athletes and Undermine Local Teams
International Liberty
by Dan Mitchell
1w ago
The fundamental insight of supply-side economics is that people respond to incentives. So if the government imposes a high tax rate on income, people will try to avoid or evade the money grab. Especially if they have any ability to control the timing, level, and composition of their income. Star athletes are definitely in this group. Phil Mickelson Max Verstappen Usain Bolt LeBron James Bryce Harper Dwight Howard Shohei Ohtani Tyreek Hill We can add Grant Williams to that list, as reported last year from Boston. Testing the market worked out for Williams, who will now make more money while ..read more
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Yes to Globalization, No to Global Governance, Part II
International Liberty
by Dan Mitchell
1w ago
Five years ago, I wrote that globalization is good, but that global governance is bad. That’s because globalization (as I define it) means free trade and other forms of cross-border economic activity. All of which is very consistent with economic liberty. Global governance, by contrast, is very worrisome since it creates opportunities for politicians to collude in ways that undermine economic freedom. Which is why I’ve tried to draw a distinction between good globalism and bad globalism. Ilya Somin of George Mason University’s law school has a similar perspective. Here are some excerpts from h ..read more
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Pakistan’s Tax-and-Spend Follies
International Liberty
by Dan Mitchell
1w ago
Citing a report in the New York Times, I wrote two days ago about how excessive government spending is the real reason for economic and political turmoil in Sri Lanka and Bolivia. Kenya and Pakistan also were featured in the story, but I didn’t focus on those countries because I had previously written about (see here and here) how they got in trouble because of a growing burden of government. For today’s column, though, I’m going to revisit fiscal policy in Pakistan because the U.K.-based Financial Times has a story about the fiscal mess in that country. The report includes this chart showing ..read more
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Labour’s More-of-the-Same Fiscal Agenda
International Liberty
by Dan Mitchell
1w ago
At the end of last week, I wrote about the Conservative Party’s crushing defeat in the United Kingdom. In that column, I cited the Wall Street Journal, which groused that the Tories didn’t deliver better economic policy. Indeed, the WSJ specifically complained that higher taxes were one of the main outcomes after 14 years of the Conservative Party being in power. I wondered whether that was correct, so I crunched the numbers from the IMF’s database. Lo and behold, the WSJ editorial hit the nail on the head. Measured as a share of GDP, there is now a much harsher tax burden in the United Kingdo ..read more
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