Wednesday, December 27, 2017

John Hinderaker and Steven Hayward Are Actually Becoming More Economically Incompetent With Age

First of all, let's all remember that Powerline has the worst record when it comes to discussing economics.  As I pointed out several years ago, they spent an entire year getting literally everything wrong. 

So, they're now at it again over the latest changes to the tax code from the Republicans in Congress.  There's just one problem: there is actually little correlation between tax rates and growth.  "But the economy grew after the Reagan tax cuts!" you respond.  Actually, cutting interest rates (again, econ 101 here) had a little more to do with that than you think.  And then there's this:

This chart that shows the highest marginal tax rate (in blue, left scale) and the Y/Y percentage change in GDP growth (in red, right scale).  Notice that the red peaks are in fact higher when taxes are higher, completely contradicting Powerline's argument.

     And then there's this little scatter plot from Jared Bernstein (someone who has actually studied economics):

There is no statistical correlation between tax rates and per capita GDP growth.

Now, this analysis involves data, facts, and math -- three areas where all the Powerline contributors are deficient.  Also remember they're political sycophants -- if the Republican party said, "The sky is now pink," all the guys at Powerline would dutifully write, "The sky is pink."  In other words, it will go over their heads.  And even if they (or their readers) could understand it, they wouldn't listen because it runs against Republican orthodoxy.  

But for those of us who still use data, facts, and statistical analysis, it should be helpful.