Fake News Reporting Thread

[Proteus_MST]

I just know the basic principles of economics and don't **** it up for the whole world to see and then claim to be an expert.

With other words, your credentials in economics are even lower than Donald Trumps (who, at least, claims to have a Bachelors degree there ... although it doesn't seem to have been of much use )

[rah]

I just know the basic principles of economics and don't **** it up for the whole world to see and then claim to be an expert.

Translation....."I read it on Infowars"

[Kidlicious]

With other words, your credentials in economics are even lower than Donald Trumps (who, at least, claims to have a Bachelors degree there ... although it doesn't seem to have been of much use )

You're hilarious when you puff yourself up.

[JohnT]

I just know the basic principles of economics and don't **** it up for the whole world to see and then claim to be an expert.

So... none.

As I figured, but it's good to have verification.

Of course, I'm sure I don't need to tell your enlightened mind that this...

When companies make more money they pay more for everything. That includes labor. Do you know the first thing about economics, or are you completely ignorant on the subject? If so it's not too late to keep your trap shut

... are actually issues relating to corporate finance and not economics. It is easy for the unlearned to make this sort of mistake, as we both know, it is surprising that an esteemed mind such as yours made it.

Oh, no. I'm sorry. It is not surprising.

There are many, many ways in which the above is stupid. But let's go with one:

Revenues: $1m
COGS: $600k
SG&A: $250k
Pre-tax profit: $150k

... in year 2, the company finds better suppliers:

Revenues: $1m
COGS: $550k
SG&A: $225k
Pre-tax profit: $225k

WOW, KID, THIS COMPANY MADE MORE MONEY BY SPENDING LESS! HOW THE EVER-LOVING HELL DID THAT HAPPEN?

Next year, using Kidonomics, er, Kidancials, people are just given wage increases, just because:

Revenues: $1m
COGS: $650k
SG&A: $300k
Pre-tax profits: $50k

I mean, since the company made more money in year 2, it is only reasonable that the CEO decided to pay more for inputs, sales, general expenses, and administration, right? I bet the CEO not only kept his job for reducing corporate profits by $175k, he was given a raise! Because, after all,

When companies make more money they pay more for everything. That includes labor(!)

[-Jrabbit]

I claim to know the basic principles of economics, **** it up for the whole world to see, and then claim to be an expert.

FTFY

[rah]

And like every other time, he will continue to not provide any proof of expertise, obviously because he is not an expert at anything he discusses here.
He just regurgitates what he reads on infowars and the like and pretends he understands it.

[JohnT]

Hey, Kid! What is the marginal tax rate at which the Laffer curve fails? In other words, at what % rate does cutting taxes not incentivize people to "invest" in increased production, thereby raising tax revenues?

I won't keep you in suspense: most theoretical estimates put the peak around 55-70%. IOW, once the top marginal rate drops below 55%, (at the lowest), Laffer curve arguments for cutting taxes are made only by those with no understanding of how economics work... or by those with a vested interest in selling the viability of the curve which bears their name.

This paper (PDF!), one among thousands, argues for a peak curve of 61%.

https://www.google.com/url?sa=t&sour...eyPdVnwbCAJILe

No reputable economist should have made the Laffer curve argument for cutting taxes in America at any time since 1986.

And yet here you are...

[rah]

It would have been more fun to not answer it. He would have googled it and then tried to explain it (totally in error of course) and claimed it proved he was an expert in the field.

Win win, it would have taken him considerable time and he still would have looked like a kidiot.

[JohnT]

True, but I didn't want to keep anybody else in suspense either.

And you just know he is furiously searching for a cite which refutes me.

[rah]

Have to admit I was a little bit curious. I had one econ class back in college (1978) So my memory was just a TAD fuzzy.

[JohnT]

I mean, at its heart the Laffer curve is nothing more than a standard profit maximization curve applied to tax rates. Sell a bag of chips for $0, you earn no revenue. Sell it for $1,000,000,000, you earn no revenue. At what point along that price curve do you earn the most revenue?

Same thing goes for Laffer. I mean, the guy drew it up on a napkin back in 1974 when he proposed it to, IIRC Henry Kauffman. It's not that difficult to understand if you have a basic econ 101 understanding of this topic.

The warping came with the pundits who took the idea of "cut tax rates to increase tax revenues" without understanding... or caring... that the Laffer curve is, in fact, a curve.

(Note: the above illustration might give one the idea that 50% is the right figure. It's not, the pic is a basic introduction to the concept.)

[Giancarlo]

I just know the basic principles of economics and don't **** it up for the whole world to see and then claim to be an expert.

So you are a graduate of trump university?

[pchang]

I would like to point out that at the time of the Trump Tax Cuts, I predicted that wages would not increase, but that stock buy backs would. Of course, Kid disagreed with me.


Now we see, that wages have basically increased to match inflation (or fall just shy of matching inflation) and stock buybacks have reached record levels. I am only a small player, but I estimate that stock buybacks have netted me at least an extra $40,000 in income so far this year since the tax cuts were enacted. Meanwhile, any take home wage increases have been negligible.

[Kidlicious]

I mean, at its heart the Laffer curve is nothing more than a standard profit maximization curve applied to tax rates. Sell a bag of chips for $0, you earn no revenue. Sell it for $1,000,000,000, you earn no revenue. At what point along that price curve do you earn the most revenue?

Same thing goes for Laffer. I mean, the guy drew it up on a napkin back in 1974 when he proposed it to, IIRC Henry Kauffman. It's not that difficult to understand if you have a basic econ 101 understanding of this topic.

The warping came with the pundits who took the idea of "cut tax rates to increase tax revenues" without understanding... or caring... that the Laffer curve is, in fact, a curve.

(Note: the above illustration might give one the idea that 50% is the right figure. It's not, the pic is a basic introduction to the concept.)

The Laffer Curve demonstrates maximization of tax revenue, which has nothing to do with wage growth due to increased employer revenue. This is awesome!

[Kidlicious]

So... none.

As I figured, but it's good to have verification.

You are also not good at logic. Do you claim to also be an expert in that?