LATEST
My Wall Street Journal Op-Ed: Without Spending Cuts, Brace for Slow Growth Trade deficits and the mistaken belief that they chiefly fund business investment have led to a debt-fueled increase in American consumption. This surging consumption contributed to the 2008 financial crisis and unsustainable federal deficit spending while doing little to boost domestic production. If the demand for business investment primarily drove trade deficits, real interest rates and trade deficits would rise with the demand for domestic business investment. But since 2000, real interest rates have tended to fall as trade deficits expand—at least until recently. Business investment hasn’t been correlated with… Read More
My Wall Street Journal Letter To The Editor: Risk-Averse Offshore Savings Proffered At Near-Zero Interest Rates Didn’t Fund Increased Business Investment In their Feb. 21 op-ed “Trump’s Myth of the Trade Deficit,” Phil Gramm and Donald Boudreaux correctly note that when American demand for investment exceeds domestic savings, trade deficits create American jobs by funding otherwise unfunded domestic investment with offshore savings. But that hasn’t been the case for decades. Risk-averse offshore savings proffered at near-zero interest rates didn’t fund increased business investment. They funded a one-time increase in subprime consumption before the financial crisis and an enormous deficit-financed increase in handouts after the financial crisis. We borrowed and gave away… Read More
My Wall Street Journal Op-Ed: Why the U.S. Economy Is Trouncing Europe’s Economists never cite one of the most significant statistics about the U.S. economy. According to data released last week by the Organization for Economic Cooperation and Development, only about 12% of Americans score at the highest levels on internationally administered academic tests, while 34% score at the lowest levels—nearly three low scorers for every high scorer. Germany’s figures are nearly even: 18% score at the highest levels and 20% at the lowest. Put another way, Germany’s ratio of high to low scorers is almost three times America’s. Scandinavia’s is five… Read More
My Wall Street Journal Op-Ed: You Are Right to Worry About the Economy Regarding “Why Americans Are Down on a Strong Economy” (Page One, Feb. 8): America is on what Federal Reserve Chairman Jerome Powell calls “an unsustainable fiscal path.” Well into the business cycle, we are pumping fiscal stimulus equal to an unprecedented 6% of GDP and a quarter of all government spending into the economy, with no end in sight. Federal debt has risen from 70% of GDP after the financial crisis to nearly 100% today, following $5 trillion of pandemic spending to close what was likely a $1 trillion shortfall.… Read More
Read Former White House CEA Chairman Kevin Hassett’s Interview of Ed Conard in National Review In National Review, Kevin Hassett, the former Chairman of the Council of Economic Advisers, asks Ed Conard to defend conservative free market capitalism and how it promotes entrepreneurial risk-taking that has grown middle-class incomes faster than Europe. Five Questions for Ed Conard National Review Online August 21, 2020 1) Many liberals claim capitalism no longer works for the middle and working class. Is it true? No. According to the Congressional Budget Office, prior to the pandemic, middle-class incomes had grown 60 percent more than inflation since 1980. The income of the poorest… Read More
Lies, Damned Lies, and Steve Rattner’s Statistics Lies, Damned Lies, And Steve Rattner’s Statistics If liberal economists could win the economic debate with honest arguments, they would make them. As President Reagan once joked, “Well, the trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so.” In his New York Times op-ed, Steve Rattner adds his name to the list of people willing to compromise their reputation to mislead the American people. No serious economist would measure a president’s performance blindly from the day they stepped into… Read More- Thomas Philippon Claims the US Has Grown Less Competitive Than Europe. Seriously?! I Take Him to Task in My NRO Review of His Book With profits rising, productivity growth slowing, investment middling despite near-zero interest rates, and large competitors gaining market share, proponents of income redistribution insist that an increase in monopoly rents — profits earned by cooperating with competitors to raise prices and restrict output rather than competing honestly with them — has misallocated resources, increased income inequality, and slowed middle- and working-class wage growth. If cronyism increasingly misallocates resources, theoretically policymakers can redistribute income without significantly slowing growth and diminishing prosperity — the proverbial free lunch. Politicians such as Elizabeth Warren insist… Read More
- My National Review Op-Ed explains why CBO expects the tax cut to pay for itself Is the tax cut expected to pay for itself? Yes — if we use the Congressional Budget Office’s forecast and any economically logical standard, the tax cut makes both current and future generations better off. The CBO now expects the nominal gross domestic product to increase nearly $750 billion more per year by 2020 than in its forecast prior to the tax cut. It originally attributed about one third of that growth to the tax-cut legislation — even by that estimate, the cut more than pays for itself. The CBO… Read More
My USA Today Op-Ed: “Tax Cut Law Helps Future Generations” Tax Cut Law Helps Future Generations A one-time increase in gross domestic product that generations can enjoy for years to come is not a 'sugar high' Borrowing to buy an asset that produces more income than the interest expense makes your children richer. The debt doesn’t make them poorer. Without this basic understanding of finance, deficit hawks can’t distinguish deficit-financed consumption from borrowing that increases the economy’s capacity to pay the interest on the borrowed money, including any resulting increase in the interest rate. The latter makes future generations richer,… Read More
My Wall Street Journal Op-Ed: Is the Tax Cut Paying For Itself? By a Mile. Tax Reform Is Covering Its Costs Faster growth is on track to outpace debt in the next decade. Is the 2017 tax reform paying for itself? It’s a complicated question, but the critics have made up their minds. Outlets like the Tax Policy Center claim the Tax Cuts and Jobs Act has diminished federal revenue rather than increase it as some supporters predicted. Other skeptics lament surging government deficits and debt. Some point to last year’s brief economic spurt as evidence of the law’s failure to drive long-term growth. Even… Read More
My National Review Op-Ed: “Let’s Not Kid Ourselves About 70% Tax Rates” Let’s Not Kid Ourselves About 70% Tax Rates Their only justification is to confiscate others’ money. My op-ed in Tuesday’s Wall Street Journal argued that academic justifications for 70 percent marginal tax rates, such as Peter Diamond and Emmanuel Saez’s, are nothing more than a veneer intended to deceive a wider audience that doesn’t know better. Saez’s expansion of his justification for confiscatory taxes in the New York Times does little to prove otherwise. Diamond and Saez’s original argument for a 70 percent tax rate – that it would enhance both tax revenue and social welfare – ignores the… Read More
My Wall Street Journal Op-Ed: “The Crippling Cost of 70% Tax Rates” The Crippling Cost of 70% Tax Rates Alexandria Ocasio-Cortez’s proposal would smother investment and innovation, leaving America poorer. Newly elected Rep. Alexandria Ocasio-Cortez spent her first few weeks on Capitol Hill calling for a 70% top marginal income-tax rate, and suddenly the debate over optimal rates has reopened. To support her charge, some liberals are citing a 2011 study by economists Peter Diamond and Emmanuel Saez, which advocates for confiscatory upper-range tax rates. But a quick look at their analysis reveals grave caveats that only an advocate of higher taxes could possibly… Read More
My National Review Op-Ed: Free-Market Republicans Risk Irrelevance by Ignoring the Concerns of Blue-Collar Voters Free-market Republicans must recognize they can’t build a winning coalition without the president’s supporters. In our two-party democracy, agendas without winning coalitions are largely irrelevant. Edward Conard National Review Online June 16, 2018 Prior to the president’s victory, protectors of free enterprise, foreign-policy hawks, and social conservatives controlled the GOP by giving each other what they wanted most: lower taxes and restrained spending; larger defense budgets; and judges who limited the federal government. President Trump’s supporters upended this coalition, seized control of the GOP, and won the presidency with victories… Read More
My Fox News Op-Ed: What Trump Critics Still Don’t Get About Him Edward Conard Fox News January 31, 2018 Democrats wasted no time continuing their nonstop attacks on President Trump after his State of the Union address Tuesday. They insist Donald Trump is the worst president in American history. While President Trump has left himself open to well-deserved criticism, many still don’t understand why he was elected and continues to retain the support of millions of Americans. Here’s why: President Trump shows concern for blue-collar Americans. Most Americans don’t have college degrees and big paychecks. They worry about factories and other businesses leaving… Read More
My National Review Op-Ed: “Don’t Subsidize Low-Wage Cities” Edward Conard National Review Online April 5, 2018 A new study by Harvard economists Benjamin Austin, Ed Glaeser, and Larry Summers, “Saving the Heartland: Place-Based Policies in 21st Century America,” laments that although wages are far higher in America’s most productive cities than they are elsewhere, Americans have become less likely to move to new regions with better economic opportunities. The authors fear that the country is “evolving into durable islands of wealth and poverty.” They recommend subsidizing low-wage geographies, through welfare spending and infrastructure investment, for example. Unfortunately, their… Read More
HIGHLIGHTS
- My Wall Street Journal Op-Ed: Without Spending Cuts, Brace for Slow Growth Trade deficits and the mistaken belief that they chiefly fund business investment have led to a debt-fueled increase in American consumption. This surging consumption contributed to the 2008 financial crisis and unsustainable federal deficit spending while doing little to boost domestic production. If the demand for business investment primarily drove trade deficits, real interest rates and trade deficits would rise with the demand for domestic business investment. But since 2000, real interest rates have tended to fall as trade deficits expand—at least until recently. Business investment hasn’t been correlated with… Read More
- My Wall Street Journal Letter To The Editor: Risk-Averse Offshore Savings Proffered At Near-Zero Interest Rates Didn’t Fund Increased Business Investment In their Feb. 21 op-ed “Trump’s Myth of the Trade Deficit,” Phil Gramm and Donald Boudreaux correctly note that when American demand for investment exceeds domestic savings, trade deficits create American jobs by funding otherwise unfunded domestic investment with offshore savings. But that hasn’t been the case for decades. Risk-averse offshore savings proffered at near-zero interest rates didn’t fund increased business investment. They funded a one-time increase in subprime consumption before the financial crisis and an enormous deficit-financed increase in handouts after the financial crisis. We borrowed and gave away… Read More
- My Wall Street Journal Op-Ed: Why the U.S. Economy Is Trouncing Europe’s Economists never cite one of the most significant statistics about the U.S. economy. According to data released last week by the Organization for Economic Cooperation and Development, only about 12% of Americans score at the highest levels on internationally administered academic tests, while 34% score at the lowest levels—nearly three low scorers for every high scorer. Germany’s figures are nearly even: 18% score at the highest levels and 20% at the lowest. Put another way, Germany’s ratio of high to low scorers is almost three times America’s. Scandinavia’s is five… Read More
- My Wall Street Journal Op-Ed: You Are Right to Worry About the Economy Regarding “Why Americans Are Down on a Strong Economy” (Page One, Feb. 8): America is on what Federal Reserve Chairman Jerome Powell calls “an unsustainable fiscal path.” Well into the business cycle, we are pumping fiscal stimulus equal to an unprecedented 6% of GDP and a quarter of all government spending into the economy, with no end in sight. Federal debt has risen from 70% of GDP after the financial crisis to nearly 100% today, following $5 trillion of pandemic spending to close what was likely a $1 trillion shortfall.… Read More
- Read Former White House CEA Chairman Kevin Hassett’s Interview of Ed Conard in National Review In National Review, Kevin Hassett, the former Chairman of the Council of Economic Advisers, asks Ed Conard to defend conservative free market capitalism and how it promotes entrepreneurial risk-taking that has grown middle-class incomes faster than Europe. Five Questions for Ed Conard National Review Online August 21, 2020 1) Many liberals claim capitalism no longer works for the middle and working class. Is it true? No. According to the Congressional Budget Office, prior to the pandemic, middle-class incomes had grown 60 percent more than inflation since 1980. The income of the poorest… Read More
- Lies, Damned Lies, and Steve Rattner’s Statistics Lies, Damned Lies, And Steve Rattner’s Statistics If liberal economists could win the economic debate with honest arguments, they would make them. As President Reagan once joked, “Well, the trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so.” In his New York Times op-ed, Steve Rattner adds his name to the list of people willing to compromise their reputation to mislead the American people. No serious economist would measure a president’s performance blindly from the day they stepped into… Read More
- My National Review Op-Ed explains why CBO expects the tax cut to pay for itself Is the tax cut expected to pay for itself? Yes — if we use the Congressional Budget Office’s forecast and any economically logical standard, the tax cut makes both current and future generations better off. The CBO now expects the nominal gross domestic product to increase nearly $750 billion more per year by 2020 than in its forecast prior to the tax cut. It originally attributed about one third of that growth to the tax-cut legislation — even by that estimate, the cut more than pays for itself. The CBO… Read More
- My USA Today Op-Ed: “Tax Cut Law Helps Future Generations” Tax Cut Law Helps Future Generations A one-time increase in gross domestic product that generations can enjoy for years to come is not a 'sugar high' Borrowing to buy an asset that produces more income than the interest expense makes your children richer. The debt doesn’t make them poorer. Without this basic understanding of finance, deficit hawks can’t distinguish deficit-financed consumption from borrowing that increases the economy’s capacity to pay the interest on the borrowed money, including any resulting increase in the interest rate. The latter makes future generations richer,… Read More
- My Wall Street Journal Op-Ed: Is the Tax Cut Paying For Itself? By a Mile. Tax Reform Is Covering Its Costs Faster growth is on track to outpace debt in the next decade. Is the 2017 tax reform paying for itself? It’s a complicated question, but the critics have made up their minds. Outlets like the Tax Policy Center claim the Tax Cuts and Jobs Act has diminished federal revenue rather than increase it as some supporters predicted. Other skeptics lament surging government deficits and debt. Some point to last year’s brief economic spurt as evidence of the law’s failure to drive long-term growth. Even… Read More
- My National Review Op-Ed: “Let’s Not Kid Ourselves About 70% Tax Rates” Let’s Not Kid Ourselves About 70% Tax Rates Their only justification is to confiscate others’ money. My op-ed in Tuesday’s Wall Street Journal argued that academic justifications for 70 percent marginal tax rates, such as Peter Diamond and Emmanuel Saez’s, are nothing more than a veneer intended to deceive a wider audience that doesn’t know better. Saez’s expansion of his justification for confiscatory taxes in the New York Times does little to prove otherwise. Diamond and Saez’s original argument for a 70 percent tax rate – that it would enhance both tax revenue and social welfare – ignores the… Read More
- My Wall Street Journal Op-Ed: “The Crippling Cost of 70% Tax Rates” The Crippling Cost of 70% Tax Rates Alexandria Ocasio-Cortez’s proposal would smother investment and innovation, leaving America poorer. Newly elected Rep. Alexandria Ocasio-Cortez spent her first few weeks on Capitol Hill calling for a 70% top marginal income-tax rate, and suddenly the debate over optimal rates has reopened. To support her charge, some liberals are citing a 2011 study by economists Peter Diamond and Emmanuel Saez, which advocates for confiscatory upper-range tax rates. But a quick look at their analysis reveals grave caveats that only an advocate of higher taxes could possibly… Read More
- My Fox News Op-Ed: What Trump Critics Still Don’t Get About Him Edward Conard Fox News January 31, 2018 Democrats wasted no time continuing their nonstop attacks on President Trump after his State of the Union address Tuesday. They insist Donald Trump is the worst president in American history. While President Trump has left himself open to well-deserved criticism, many still don’t understand why he was elected and continues to retain the support of millions of Americans. Here’s why: President Trump shows concern for blue-collar Americans. Most Americans don’t have college degrees and big paychecks. They worry about factories and other businesses leaving… Read More
- My New National Review Op-Ed: Why I Oppose the Rubio-Lee Amendment Middle-class tax cuts are already the tax bill’s biggest deficit-driver, and a higher corporate rate would reduce economic growth. Edward Conard National Review Online December 1, 2017 Federal debt has risen from 33 percent of GDP prior to the financial crisis to 75 percent today — an unprecedented level for this point in the economic cycle — and is projected to rise to 150 percent over the next 30 years as Baby Boomers retire if we don’t raise taxes significantly. Let’s not kid ourselves. Deficits matter. In the GOP tax… Read More
My Wall Street Journal Op-Ed: America’s Got Talent, but Not Nearly Enough In today's Wall Street Journal, I argue that high-skilled immigration is the only way America can meet the growing cost of retiring baby boomers without growth-killing tax increases that jeopardize America’s future in an increasingly dangerous world. Read the op-ed here and below. America’s Got Talent, but Not Nearly Enough Trump is right to back skills-based immigration. But fewer green cards would defeat the purpose. President Trump has proposed cutting the number of green cards issued each year from one million to 500,000 and issuing them based on skill levels. This approach… Read More- A Trade Policy That Wouldn’t Leave Low-Wage Workers Behind Edward Conard National Review December 5, 2016 President-elect Donald Trump has shown Republicans how to forge a new electoral college majority by energizing blue-collar voters. His victory, with its demands to restrict trade and immigration, also marks the end of free-market advocates’ control over the Republican party. But there is a way that these advocates might find common ground with blue-collar Republicans to accelerate wage growth, better fund looming pension benefits without tax increases, and defeat the next iteration of liberalism. Republicans have always been a coalition of voting minorities,… Read More