roundtable: Re: Republicans

roundtable: Re: Republicans

Re: Republicans

Mike W. Perry (discover@halcyon.com)
Thu, 2 Feb 1995 23:33:57 -0800 

Message-Id: <v01510102ab578a3ad575@[204.29.16.10]>
Date: Thu, 2 Feb 1995 23:33:57 -0800
To: roundtable@cni.org
From: discover@halcyon.com (Mike W. Perry)
Subject: Re: Republicans


>Frank is right that the trickle-down idea was silly, but the reason it
>failed was slightly different.  It wasn't capital that absorbed the
>benefits of the tax cuts, it was Monopolies (natural resources and other
>government-sponsored monopolies).  Land speculators are the best example,
>as you can see the prices of residential land skyrocketing during the
>trickle-down period (other housing costs, such as union wages and
>building materials, only kept pace with inflation).

Actually, housing and land costs were skyrocketing during the 70s while
Reagan will little more than movie reruns. The cause was simple. All the
baby boomers not only hitting home buying ages but with expensive tastes 
in homes. A tax system that encourages the middle-class to build up their
wealth in homes compounded the problem. You can't tax-deduct the interest
on any other kind of investment. The result, too much money chasing too
little real estate--the classic cause of inflation.

Incidently, much of the commercial real estate market went bust in the 
late 80s when the tax code became less favorable for such investing.

The cost of "natural resources" hasn't been skyrocketing. I belive it 
was Thomas Sowell who won a bet with a resource doommonger. He let the 
guy choose 10 raw materials and won when the price of all declined (in 
real terms) during the 80s. Gold is about the only natural resource 
where supply exceeds demand and there much of the demand is hoarding 
(particularly in the Far East) and jewelry. Neither is critical to 
human life.

The real areas where costs have been skyrocketing are education (lower 
and higher) and medicine. Both have heavy government involvement and 
subsidies as well as little opportunity for consumer choice.

Renting in Seattle,
Mike Perry

    Mike Perry, 11537 34th Ave NE, Seattle, WA 98125 (206) 365-1624
    <discover@halcyon.com>
* * * *
Man is but a reed, the weakest thing in nature. But he is a thinking reed.
It is not necessary, in order to crush him, that the entire universe should
take up arms: a mist, a drop of water, will suffice to kill him. But even
if the universe were to crush him, man would still be nobler than his
destroyer, because he would know himself to be dying, and he would know in
what respect the universe is mightier than he; but of these things the
universe knows nothing whatsoever.--BLAISE PASCAL, Pensees
* * * *

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