Columnist.
First, an apology. In a July 2 article in this newspaper [Investor's Business Daily] I erred in citing Bureau of Labor Statistics numbers comparing the superior job creation performance of no-income-tax Texas and Florida with the two states with the highest income-tax rates, California and New York. This set off a brouhaha in the media — although the errors in no way change the conclusion that low-tax states have grown much faster than high-tax states. I wrote that Texas had gained one million jobs in the last five years while California lost jobs. Regrettably, the correct period was a slightly longer period from January 2008- December 2013. Recall, the Great Recession started in December of 2007. The BLS household survey on employment finds that over this period Texas gained 1.08 million jobs and California lost 5,000 jobs.
The last several months have seen a wave of American companies merging with foreign companies, a process known as "inverting." In effect, inversion is the corporate equivalent of a renunciation of American citizenship. By some estimates, about $250 billion of these deals have been consummated since the start of the year, and another $100 billion could be finalized soon. As inversions have exploded onto the policy scene, Washington is scrambling to find ways to counteract a trend that could deprive the federal treasury of tens of billions of tax dollars, which Washington believes belong to the government. In President Obama's own words, "My attitude is I don't care if it's legal, it's wrong."
Thursday's headline in the Los Angeles Times -- "Argentina Defaults on International Debt" -- spooked me, as it did investors. The stock market tanked on the news. All Americans should feel the same apprehension. Argentina has about $200 billion in debt including billions in restructured bonds that it still can't make payments on. Now Argentina has to go hat in hand to its debtors to try to reach a new repayment deal. Standard and Poor's declares that the nation is already in "technical default." Interest rates and inflation are in double digits. The stock market collapsed 8.4 percent in one day. This is akin to a 1,000-point decline in the Dow Jones Industrial Average.
Could the radical-Green movement in America make mankind's future resemble a science-fiction Earth ruled by apes?
The Obama administration announced new rules this week that will effectively punish American companies who move facilities and jobs overseas to save on taxes. Labor union backed groups have denounced American businesses that move offshore to avoid the 35 percent corporate tax as "unpatriotic." The White House claims such moves cost the Treasury billions of dollars. But how are such moves unpatriotic? Is it wrong for businesses to try to reduce their tax burden? Business CEOs have a duty to their shareholders to lower their costs and increase their profits. This may come as a shocker to Washington, but companies are in business to make profits.
Imagine that you were at home on a weekend afternoon and the doorbell rang and a representative from Boeing stood at the door with a tin cup asking you to contribute $10 to the Fortune 100 company so it can sell more products overseas. It's a good bet you would slam the door in the lobbyist's face. But this is, in effect, what these corporate lobbyists are doing in Washington now. Instead of panhandling door to door, they're going to one congressional office after another securing cut-rate insurance that could cost taxpayers more than $2 billion over the next decade. The program is called the Export-Import Bank. Taxpayer groups have been trying to get rid of this corporate welfare racket for 30 years. Yet Congress always seems to rush to the rescue on behalf of GE, Caterpillar, Boeing and the rest.
Anyone who supports the current tax system in America is unpatriotic. There, I said it. The current IRS tax system is anti-American. It sends jobs and factories and research facilities that should be located inside the land of the free to places like Singapore, Ireland, and Indonesia. It hurts American workers -- especially unionized blue-collar workers who see their jobs shipped overseas. And our workers' wages are lower than they would be without this perverted tax code.
Right-to-work is back in the spotlight, thanks to the recent Supreme Court decision in *Harris v. Quinn.* The court ruled that Illinois home care workers cannot be compelled to pay union dues to the Service Employees International Union if those workers are not union members. This was a limited victory for worker rights against coercive unionization and forced payment of union dues of all employees. Most Americans would probably be surprised to learn that in 2014 this is not already a protected right in most states.
The commerce department reported Wednesday that the economy contracted by nearly 3 percent from January through March. This dismal shrinkage in output has many Americans worrying about a dreaded double dip recession. On the jobs front, it feels to many Americans that the recession never ended. One of the misleading headlines from last month's employment report was that all the jobs lost during the recession have finally been won back. Well, not really.
School's out, and I'm terrified my two teenage boys won't get a job this summer and will sit around watching TV, playing computer games or just eating me out of house and home. Idle hands really are the devil's workshop, and at this stage, I'd pay an employer to get the kids out of the house and teach them some practical lifetime skills. My first job was working at a warehouse for $2.35 an hour in suburban Chicago. The first job for me -- and many others -- was one of the most important.
Paul Krugman of the New York Times took a shot at Arthur Laffer and me this past weekend calling us "charlatans and cranks" for advising governors around the country to cut taxes to boost economic growth and jobs. Krugman says it went awry in Kansas, where Republican Gov. Sam Brownback cut the top tax rate from 6% to 4.5% and to zero on small-business income. According to him, "Kansas isn't booming, in fact its economy is lagging." Kansas shows that "tax cuts don't have magical powers," he concludes. Well, it's true, tax cuts don't have magical powers, and it is an often-repeated caricature by the left that Laffer and I and others believe that to be true. There are dozens of reasons why some places grow and others lag behind -- and taxes is only one of them.
Eric Cantor must have woken up this morning feeling like the Rodney Dangerfield of American politics: I get no respect. In the aftermath of his stunning loss, Mr. Cantor has been attacked from all sides by political Monday-morning quarterbacks -- for supposed arrogance, for ignoring his constituents, for being too moderate, too pro-business, not free-market enough, weak on the border issues, and so on. There is probably an element of truth to each of these criticisms, but now that it is fashionable to treat Mr. Cantor as the piñata for everything that is wrong in Washington, I'd like to take a moment to do something no one else has done: Defend him.
This is the time of year when teenagers scramble to land a summer job, but many states and cities make that search far more difficult. As a father of two teens, I know first-hand how tough that job search can be and the negative repercussions about teens staying idle -- watching TV, playing computer games, and hanging out with the wrong crowd. So why do states and localities make jobs for first-time workers even harder to find by raising the minimum wage? Earlier this month, Seattle raised its minimum wage to $15 an hour -- near the highest in the nation and double the federal rate of $7.25.
One of the leading leftwing environmentalists last week described the hundreds of thousands of Americans who may lose their jobs due to the Obama administration's new anti-carbon regulations as "collateral damage" in the fight against global warming. The offensive comments were issued by William S. Becker, the head of the Climate Action Project, a well-funded environmental group. In his piece in the Huffington Post praising the new Environmental Protection Agency regulations to stop climate change, he lamented that "there is nothing explicit in the [Obama] plan to mitigate or adapt to the economic disruption the clean energy transition will cause for coal and oil-country families."
Economists are scratching their heads trying to figure out a puzzle in this recovery: Why are young people not working? People retiring at age 60 or even 55 in a weak economy is easy to understand. But at 25? The percentage of adult Americans who are working or looking for work now stands at 62.8%, a 36-year low and down more than 3 percentage points since late 2007, according to the Labor Department's May employment report.
