Edward Conard

Top Ten New York Times Bestselling Author

  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
Upside of Inequality Oxford Unintended Consequences

Paul Krugman The New York Times
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The Tax Cuts and Jobs Act has been criticized for its economic implications, particularly by economist @PaulKrugman. A third of US corporate profits are owned by foreign nationals, making the US poorer overall. @PaulKrugman -.

The Tax Cuts and Jobs Act (TCJA) under the Trump administration has been criticized for its economic implications, particularly by economist Paul Krugman. Approximately one-third of U.S. corporate profits are owned by foreign nationals, meaning a significant portion of the tax cut benefits flowed abroad rather than boosting domestic GDP. This redistribution likely made the U.S. poorer overall. Furthermore, the tax cut has not been self-financing, necessitating future compensatory measures such as tax increases or spending cuts on valued programs. These adjustments will disproportionately affect the broader population, as the original tax cut benefits were concentrated among the top 10%. Consequently, the majority of Americans may find themselves worse off due to this legislative change.

"...The key point to realize is that in today’s globalized corporate system, a lot of any country’s corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals - which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer... Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way - either by raising other taxes, or by cutting spending on programs people value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent than the benefit of the original tax cut. So it’s a near-certainty that the vast majority of Americans will be worse off thanks to Trump’s only major legislative success......"
Paul Krugman, "The Trump Tax Cut: Even Worse Than You’ve Heard,"The New York Times, January 1, 2018, https://www.nytimes.com/2019/01/01/opinion/the-trump-tax-cut-even-worse-than-youve-heard.html

Ed Comment:Hmmm… International corporations (that assets foreigners own a third of) never paid much US taxes (so the taxes foreigners pay can’t go down much). Waters will pay more US taxes in the future than it did in the past (when it paid near-zero). It has to pay a one-time tax on formerly accumulated foreign profits, but that payment is payable over the next 5 years, not all at once now, so you won’t see the payments yet. The offshore profits were already loaned back to ourselves and used to buy back stock, so they won’t show as cash flowing into the US. Nevertheless, we are now borrowing money and paying a large one-time dividend (stock buyback) that frees capital for investment elsewhere in the economy since, like most tech companies, we have far more cash flow than investment opportunities given our talent constraints and willingness to bear the risk of failed investment. Formerly, we could only borrow against US cash flow. In a world with a surplus of risk-averse savings with its resulting Keynesian paradox of thrift-like effect on slowing growth, Waters borrowing more (i.e. taking more risk) and distributing it to shareholders as equity is EXACTLY what you want.

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