Combs Spouts Off

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Posts Tagged ‘growth’

Boeing opens South Carolina Dreamliner assembly plant

Posted by Richard on June 12, 2011

On Friday, ignoring a lawsuit brought by the Obama thugs running the National Labor Relations Board, Boeing opened its new $750 million final assembly plant in North Charleston, SC:

Under a blistering sun and facing a heated court battle, Boeing snipped the ribbon Friday on its new 787 Dreamliner assembly plant in North Charleston six months ahead of schedule.

Company officials, politicians and workers hailed the aerospace giant's $750 million production facility as the start of a new era in the Lowcountry.

"Everybody is so geared up," said Raffie King, of Summerville, who works in Boeing's emergency operations. "This is our house. That's what we call it."

To the loud roar of applause from the hundreds of workers and guests seated and standing outside the cavernous facility the size of 11 football fields, Boeing Vice President and General Manager Jack Jones said, "This building is open for business."

The building is something else. It can hold two rows of four jumbo jets. 

One thing rarely mentioned in the media coverage of the NLRB-Boeing story: the new Charleston location, like the existing Everett, Washington, assembly plant, is just where final assembly of the planes takes place. The incredible array of components that make up the plane is manufactured at Boeing and subcontractor facilities throughout the country (North Carolina, Texas, Connecticut, Kansas, Oklahoma, Iowa, Arizona, Minnesota, …) and across the globe (Canada, Japan, UK, Sweden, Italy, France, Australia, …). We live in a global economy, folks, and we're all better off because of it (per Ricardo's law of comparative advantage).  

In fact, the aft quarter of the 787's revolutionary fiber composite fuselage is built by Vought Aircraft Industries right next to the new Charleston plant:

The first pieces of the 787 wide-body jet, other than the aft and mid-body sections built next door, will arrive next month as 4,000 workers already hired begin to piece together the first completely assembled model of the airplane outside of Washington state.

"This is the first time we are actually going to send an aft and mid-body across the street instead of 3,000 miles away," Jones said. "Lots of good things are going to happen. This is history."

Boeing is still hiring in South Carolina. And in Washington, too, as this looks to be the most successful commercial jet ever, with over 800 already on order. South Carolina, Washington, the whole country — heck, the whole world — will gain from this.

Unless there's truth to the rumor that the President is going to appoint Wesley Mouch as his new Economic Opportunity Equalization Czar, and Mouch will then declare the Dreamliner "a national resource."  

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Remove impediments

Posted by Richard on January 28, 2009

In a newspaper ad (PDF) paid for by the Cato Institute, hundreds of economists, including Nobel laureates and others prominent in the field, have challenged President Obama's claim that "we need action by our government, a recovery plan that will help to jumpstart the economy" (emphasis added):

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth. 

Call your Congresscritter's office and tell them you think spreading around another trillion dollars that we don't have is insane and irresponsible, and giving billions of it to organizations like ACORN is contemptible and criminal. Tell them tax rate cuts will stimulate the economy, just as they did for Kennedy, Reagan, and Bush. Tell them you get more of what you reward and less of what you punish, so we should reward production, job-creation, and success — not failure.

UPDATE: I've learned via email from Cato that the ad ran in today’s New York Times (page A11) and is also scheduled to appear in the Washington Post, Los Angeles Times, Chicago Tribune, and Washington Times. Good work, Cato!

UPDATE2: The House passed the abominable $819 billion monstrosity, but with all the Republicans and 11 Democrats voting no: 

The 244-188 vote was not what Mr. Obama had hoped for. A week of presidential wooing — including a visit to the Capitol, a return visit to the White House by moderate House Republicans and a bipartisan cocktail party Wednesday night — did not yield a single Republican vote. The president also lost 11 Democrats.

Instapundit passed along this suggestion: 

UPDATE: Reader Mark Cates writes: “You might mention that it would be worthwhile to send these guys a Thank You for their vote. They probably need as much encouragement as they can get. I sent one to Shuler.”

Good suggestion.

Yep. And if, like me, you're represented by one of the 244 sleazeballs who are gleefully increasing the federal budget by 30% in one year, and during a recession to boot, send them a "Shame on you!" This battle may have been lost, but the war is just beginning. Keep the heat on!

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China in perspective

Posted by Richard on August 15, 2007

Nicholas Vardy had an interesting "Fact of the Week" in the latest issue of The Global Guru:

The next time you hear a mind-numbing statistic about China, remember this: the U.S. economy increased in size by $2.2 trillion between June 2003 and May 2006. That's the equivalent of a whole new China in just 36 short months.

And we did it without using lead paint. 

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Bad news: Congress to work harder

Posted by Richard on January 5, 2007

The Democrats have promised that the new Congress will work much harder than the previous one. No more three-day weeks, no more lengthy recesses. They want to be in session far more days and do far more legislating. Naturally, that sends shivvers down my libertarian spine. If there’s one thing I liked about having the Republicans in charge (and often, there was only one thing), it was that they didn’t get much done. To me, "Do-nothing Congress" isn’t a pejorative, it’s high praise.

According to Andrew Roth at the Club for Growth blog, it’s not just me and a few cranky libertarians that feel that way — it’s investors in general. Roth looked at 2006, comparing a dollar invested in the S&P 500 only on days when Congress was in session versus a dollar invested only when Congress was out of session. At the end of the year, the return on the former was 2.25%, and the return on the latter was 11.56%. The spread was even greater for the NASDAQ Composite Index: if you were invested only when Congress was in session, you lost 5.70%, but if you were invested only when Congress was out of session, you gained 8.19% — almost a 14-point spread.

Roth’s observation isn’t new or unique. He pointed to a nice column from last August by Amy Shlaes. She talked about Peter Singer, who first noticed the "Congressional effect" in 1991 and has now created a hedge fund dedicated to making money from it. Singer has long-term empirical data to back up his thesis:

Choosing the Standard & Poor’s 500 Index as his measure, Singer reviewed 40 years of stock data and government calendars. At least one chamber is in session for more than half of the 250-odd trading days of the year. Yet the index made a greater share of its price gains when Congress was in recess — at least two to three times greater per day.

Economists Michael Ferguson and Douglas Witte reviewed even more data over longer periods, and found the Congressional effect in four different indexes. It was especially pronounced — even flabbergasting — for the Dow Jones Industrial Average:

Since 1897, the year after the Dow was created, an impressive 90 percent of the gains came on days when Congress was out. Their charts show that a dollar invested in 1897 with the strategy of going back to cash every time Congress met was worth $216 by 2000.

But an 1897 dollar invested on the reverse strategy was worth only $2 after a century. The big gap between performances began to show up after World War I, when it became clear that Washington would play a bigger role in the country.

For both philosophical reasons and down-to-earth, bread-and-butter economic reasons, I hope Pelosi’s and Hoyer’s promises of long hours and five-day work weeks turn out to be meaningless posturing, just like their promised "ethics reforms."
 

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Floating everybody’s boat

Posted by Richard on July 26, 2006

A couple of weeks ago, I demolished (IMHO) a NYTimes editorial bad-mouthing the economy. In that post, I argued that the Bush tax cuts performed exactly as supply-siders had predicted they would, and that the result was great for the economy. Tuesday, in an OpinionJournal column, Pete du Pont echoed much of what I’d said.

Du Pont began by noting that the Democratic Party has changed a lot since JFK said, "an economy hampered by restrictive tax rates will never produce enough revenue to balance our budget, just as it will never produce enough jobs or enough profits," and 80% of Congressional Democrats voted for the Kennedy tax cuts:

Opposing tax cuts has become the mantra of the liberal left. Sen. John Kerry wants to roll back Bush’s "unaffordable tax cuts." Senator Mark Dayton (D., Minn.) called the cuts "dangerous and destructive and dishonorable." Bill Clinton in 2003 said the cuts were "way too big to avoid serious harm." And various New York Times editorials called them "economically unsound," claimed that "they will increase the deficit by hundreds of billions of dollars" and said they were unlikely "to stimulate the wallowing economy." Earlier this month House Minority Leader Nancy Pelosi promised that the election of a Democratic House in November would result in a "rollback of the tax cuts."

Of course they have it backwards. President Bush’s personal income, capital gains and dividend tax rate reductions have created economic growth, significantly increased government tax receipts, and reduced the federal deficit by nearly $130 billion.

Du Pont credited Larry Kudlow with pointing out that the U.S. economic growth of 20% — $2.2 trillion — in the past 3 years was the equivalent of adding a whole new China. I noted that factoid in my post Saturday about Nicholas Vardy’s observations regarding U.S. economic performance — six of the ten fastest-growing economies in the world are U.S. states.

DuPont poured out a plethora of positive economic statistics:

In the 2 1/4 years before the 2003 tax cuts, economic growth averaged 1.1% annually; in the three years since it has averaged 4% per year, and in the first quarter of this year it was 5.6% on an annualized basis. Inflation-adjusted per capita GDP has grown 7.8% from 2003 through the first quarter of this year.

According to the government’s establishment survey, in the 36 months since the tax cuts became law, 5.3 million new jobs have been added to the economy. … The unemployment rate dropped from 6.1% when the bills were signed to 5.4% at the end of 2004 and 4.6% today, and the rate has gone down for men, women, blacks and Hispanics. Hourly wage rates for workers are up 3.9% in the past year, and they increased at an annualized rate of 4.6% in the second quarter of this year, the highest quarterly rate in nearly 10 years.

Incomes are up too. As Stephen Moore noted in The Wall Street Journal, "the percentage of Americans earning more than $50,000 a year rose from 40.8% to 44.2%" between 2002 and 2004. As for very wealthy families, the portion of total income "captured by the richest 1%, 5% and 10% of Americans is lower today than in the last year of the Clinton administration."

All this has been good news for the government. Federal tax receipts increased by 15%– $274 billion–last year and 13%– $206 billion–in the first nine months of this fiscal year, which, as the Journal points out, means the nine-month increases for the past two years represent the highest growth rates in 25 years. …

Reducing the capital gains tax rate from 20% to 15% increased capital gains tax receipts by 79% from 2000 to 2004. Cutting the dividend tax rate by more than half–from 39.6% to 15%–increased dividend tax receipts by 35% from 2002 to 2004. And corporate tax receipts have nearly tripled since 2003, reaching $250 billion for the past nine months, 26% higher than the same period last year.

Du Pont’s conclusion? The same as mine:

Tax cuts work, and work well, for individuals, employers and even the government, which sees its revenues increase dramatically when tax cuts are enacted and left in place over time.

Being fair, however, du Pont noted that the Bush administration — and especially the Republican Congress — deserve criticism as well as praise:

The other side of the coin is the government spending rate, for it has grown by more than $800 billion–nearly 50%–during the Bush administration. Excluding war and homeland security expenditures, it has grown about 7% a year, and virtually nothing has been done to stem it.

A veto or two by the president would help, and so would some spine in the Republican House and Senate. A recent National Taxpayers Union Foundation study found that in 2005 the average Republican House member voted to increase discretionary spending by $168 billion, close to the average Democrat’s $178 billion. Republicans senators’ votes averaged $183 billion in new spending; Democratic senators $217 billion. Compare these numbers to the golden days of the Gingrich leadership: In 1997 the average House member voted to reduce spending by $6 billion while the average senator’s increase was only $4 billion. 

That’s an astonishing change for the worse among Congressional Republicans.

I think the Democrats are partly to blame, though. If they hadn’t gone so moonbatty and untrustworthy on the critical issue of national security, the Republicans wouldn’t have defied history with congressional gains in 2002. It was their smashing success in those off-year elections that made Republicans smug and arrogant. They subsequently abandoned most of the reforms of 1994, and they moved sharply left-ward on fiscal matters. They assumed that the fiscally conservative part of the base would be more afraid of Democrats than angry at Republicans.

Damn, I wish we had a responsible opposition party.
 

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American tigers

Posted by Richard on July 22, 2006

Nicholas Vardy, who makes his living offering global investing advice, took a break from discussing opportunities in China, India, Brazil, etc., to talk about what’s happening right here in the U.S.A., and why. In his latest email newsletter, he wrote:

The next time you hear a mind-numbing statistic about China, remember this: the U.S. economy has increased in size by $2.2 trillion just since June 2003. That’s the equivalent of a whole new China in just 36 short months. China and India are economic juggernauts to be reckoned with in the future. But it’s also time to give the U.S. economic tigers — the fast growing regional states — their due.

… The most dynamic growth economies on the planet are right under your nose. Last year, Arizona’s economy grew 8.7%. That’s just under the 9.3% of China, but above the 8.3% in India. Just behind India was Nevada with 8.2% and Florida with 7.8%. All this, with the headwind of an Iraq war that cost $300 billion and the $40 billion+ damage inflicted by Hurricane Katrina.

If each U.S. state were a country, they would occupy 6 of the top 10 growth positions in the global economy.

Vardy pointed out that this is truly remarkable because it’s far easier to achieve such growth in a relatively poor, underdeveloped economy:

But Chinese-style growth rates occurring in the heart of the most advanced economy in the world is virtually unprecedented.

How do the world’s other large economies compare? Last year, Japan, the world’s second-largest economy, emerging from 15 years of stagnation, grew at 1.2%. Ditto Germany; the world’s biggest exporter grew at 1.2%. Europe’s most market-oriented economy, the U.K., grew at 1.8%, while cross-channel rival France grew by 1.4%. This, in a year where global growth had never been stronger.

So, what explains the dramatic difference? I discussed this recently while taking the NYTimes to task. Vardy knows:

Yes, Americans are pragmatic, entrepreneurial and work hard. But the right policy mix also matters. There are many examples in the world — Ireland, the former Communist countries of "New Europe", Chile, and Israel — where the right policies have kickstarted otherwise moribund economies.

Tax policy is crucial, no matter which country, whether rich or poor. With dollars flowing into the U.S. Treasury up 11% this year — twice the White House’s original forecasts — it turns out the supply-siders were right. Tax cuts spur economic activity, widen the tax base, and stimulate the rising tide that lifts all boats. And what do the fastest growing U.S. tigers — Nevada, Arizona, and Florida have in common? No state taxes.

He means no state income taxes — they rely on sales (consumption) taxes for much of their revenue. The fastest-growing states — and countries — also tend to have lower taxes overall, less red tape, and fewer regulatory barriers.

Of course, moribund, low-growth countries like France and Germany (or at least, their electoral majorities) have pretty much consciously chosen to sacrifice wealth creation in order to pursue other goals — more leisure, lots of "free" government services (many of which subsidize irresponsibility and bad choices), discouraging "too much" innovation and change (favoring stasis), and punishing "too much" success (promoting egalitarianism). The consequences are predictable and unavoidable.
 

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