My wife and I just returned from Hawaii, where we celebrated our 40th wedding anniversary. During our six-day trip to Hawaii, we gave talks at the Grassroot Institute of Hawaii, the free-market think tank (http://www.grassrootinstitute.org/).
Since it was around April 15, I talked about tax policy in theory and practice, demonstrating that most tax policies violate the accountability principle, i.e., that those who benefit should pay (the user pay concept). As a result, I explained that most taxes distort economic incentives and hurt economic growth.
My wife, Jo Ann, talked about the Aesop fable, “The Ant and the Grasshopper.” She talked about the new idle class. She noted that historically the wealthy used to be the idle or leisure class. But in today’s Brave New World, the new idle class is the millions of Americans on welfare — food stamps, Medicaid, Section H housing, etc. The wealthy are the working class who are putting in long hours to keep up and pay their “fair” (sic) share to finance the new idle/welfare class.
Jo Ann’s thesis was confirmed a few days later when we attended the annual APEE meetings in Maui. APEE stands for the Association of Private Enterprise Education (http://www.apee.org/), a growing organization of academic economists and professors who meet once a year either in Las Vegas or in an exotic place like Cancun, Nassau, or Maui. I attend regularly.
In a standing room-only session, I participated in a panel on “The Outlook for the Economy,” chaired by Tom Saving of Texas A &M (and an expert on Social Security, Medicare and entitlement programs). I made the argument that the most dysfunctional part of our economy was the labor markets. I showed this chart of the labor force participation rate, and how it keeps dropping. Now, only 63% of all adults are working.
But Tom Saving showed an even more dramatic chart — this one of seniors 65 years or older who are in the labor force. While everyone else is working less, they are working more — a lot more. See the chart below.
We used to bemoan the fact that fewer and fewer young workers were around to pay for retirees’ Social Security and Medicare. But now we see that the new working class (the elderly) is subsidizing the new idle class (those on welfare)!
You Blew It! The Commercials Are Getting Way Too Long
If you subscribe to any online service, whether it be AOL, Goggle, Yahoo, or the Huffington Post, have you noticed that you are forced to watch a seemingly endless ad before the video story appears about a news item that caught your eye?
AOL and the Huffington Post are especially annoying. No wonder so many people are leaving AOL. The ads used to be 15 seconds long or sometimes only 10 seconds long. But now, they are 35 seconds! It seems to take forever in this otherwise fast-paced world to get to what you want to see. So, in protest, I refuse to watch any video story, no matter how interesting, when the commercials last more than 15 seconds. I urge you to join me in this boycott.
Youtube offers the best solution by running an ad before showing the video, but also offering a “skip ad” button that you can click after five seconds to go directly to the video if you are not interested in the ad. Now, that’s what I call consumer sovereignty!
To read my e-letter from last week, please click here. I also invite you to comment about my column in the space provided below.
o At the APEE and Grassroot meetings, I met with several top free-market economists who have all agreed to come to this year’s FreedomFest, July 10-13, in Las Vegas. They include Ken Schoolland, who teaches at Hawaii Pacific University and is the author of the bestseller, “The Adventures of Jonathan Gullible” (translated into 48 languages!)… Peter Boettke, who heads up the Austrian school at George Mason University… and Ken Elzinga, who holds the Guinness Book of World Records for teaching the most college students (nearly 50,000) at the University of Virginia. Prof. Elzinga is also the co-author of three murder mystery novels that apply economics to solve crimes. I’ve read all three, and recommend that you start with “Murder at the Margin.” Come join us: http://www.freedomfest.com/, or call Tami Holland, 1-866/266-5101.
o Las Vegas Money Show, May 13-16: Join Jim Stack, Lou Navellier, former Fed official Robert McTeer, many other experts and me at this big investment conference. Tickets are complimentary for my subscribers. Call 1-800/970-4355, and mention code # 031168.