John Tamny in his new book Popular Economics: What the Rolling Stones, Downtown Abbey, and LeBron James Can Teach You about Economics expels the notion that you need a Ph.D. to understand economics.
The Political Economy editor at Forbes and editor of RealClearMarkets argues that everyone can be an economist and a good one too. He told listeners of Breitbart News Sunday airing on Sirius XM Patriot radio, channel 125, that economics boils down to Taxes, Regulation, Trade, and Money. Moreover, if our leaders could get these four concepts right, economic growth would soar.
Stephen K. Bannon, Executive Chairman of Breitbart News and host of the show referred to Tamny as a “pure free markets guy.” He asked the editor what gave him the idea of making an economics book that a high school student can understand.
“I wrote an accessible book precisely because economics is so accessible. Nothing could be easier than economic growth. It offends me that economists would put this in terms of graphs and charts,” he told Bannon. Tamny believes that this type of rendering of economics is a waste of people’s time and its turning them away from the “wonders of capitalism… It’s all very simple and shame on economists for making what is easy all very difficult.”
When talking about taxes Tamny prefers to talk to you about the migration of the Rolling Stones. He tells us to think of taxes as a penalty for working. If Great Britain raises Mick Jagger’s income tax rate high enough, the Rolling Stones are going to find somewhere else to live, and the amount of taxes Great Britain collects from Mick will be zero.
When the income tax rate got to 83% and the capital gains to 98%, Keith Richards said in his memoirs “that was the equivalent of being told to leave the country.” When you tax the rich, argues Tamny, the rich will move. The Rollings Stones moved to France and then the United States, Tamny pointed out.
Unfortunately, the net result is the poor or the middle class end up suffering. All the people who were going to cater to the Rolling Stones albums, the sound engineers, studio muscians, and other supporters lose their income and liveleyhood. “When you over tax the rich you end by definition reducing the economic chances of the non-rich, the poor, and the middle class.”
When talking regulations the economist argues that the smartest people and the talent in any industry aren’t the regulators, they’re the people making a living at it.
“Regulation is based on the fantasy that the mediocre can effectively direct the best and brightest. That’s like expecting the Appalachian State football team to beat Michigan every time they play,” he contends. In 2007 Div II Appalachian State beat the Div I Wolverines and is considered to be the greatest upset in NCAA football. “Regulations have rarely or ever worked. All they do is slow down businesses from achieving profits. And that’s what holds back job creations, company growth, and all the things that we want… There’s no telling the amount of wealth that is destroyed every year and for decades due to regulations.”
In his book Tamny argues that economists and politicians are the biggest barrier to economic growth. “Economic growth is easy. Just remove the barriers to production among talented people and let them thrive and they will do so” he insists. Tamny maintains that if economists have to use charts and graphs it proves that they can’t explain the concepts.
The current gridlock in Washington is a good thing, Tamny informs, because it prevents politicians from making change. When politicians get involved they tend to make things worse. Tamney gives credit to the American electorate for voting in the gridlock at the polls, which proves that they do not trust either party.
Gridlock and a strong dollar are two major reasons Tamny feels that the economy for now is doing better. He points to the success of Wall Street the last few years as a product of gridlock. “Look at what the stock market has done since 2010. It soared because when the government is doing less, the real economy can grow,” he stated.
“How do you create business and jobs? It’s through investments. What are investors buying when they invest? They are buying future dollars. A stronger dollar is luring investors back into productive activity and that is going to pay off down the line,” Tamny explained.
Bannon asked Tamny, is Hillary Clinton correct that income inequality is bad for the country. “My book proves her 100% wrong. I can’t think of anything more beautiful, more full of life, more pro-happiness than income inequality. It’s what powers the world forward.” he replied. “Every time that inequality grows the lifestyle gap shrinks.” Tamny instructs that it is inequality that promoted technological achievements such as the cell phones, laptop computers, and other innovations that bring the information of all the libraries in the world to everyone’s instant disposal.
“Inequality drives down the prices of everything,” he emphasized.
Is the NFL weakened because Aaron Rodgers and Tom Brady are better passers than other quarterbacks in the NFL? No it is greater because of it. Are we as individuals weakened when we pursue the skills that most animate our talents? Is a school weakened because some people are great at debating, some are good at math and others good at throwing a football? No that’s how we get to do what we’re best at. A world without inequality is a cruel, unhappy world. And it’s one we live lives of unrelenting drudgery. Everyone’s equal in Bangladesh. In the U.S. everyone gets to enjoy for the most part a much enhanced life precisely because rich genius people like the late Steve Jobs are creating interesting things for them.