Economics from a people first point-of-view

I’ve actually met a cosmologist. She was a lively black-haired, blue-eyed lass from Ireland. We were sitting on Fort Cronkhite beach in the Marin Headlands with a group from a non-profit organization dedicated to preservation of the world’s oceans. She was studying for her PhD in cosmology and gave quite a talk on it to those near her.

What is cosmology? I gathered that it is the study of how the universe came into being and continues on. Believe me, cosmology is never a word you’ll hear spoken by an economist. But for sure, there is a religious cosmology underlying economics. If you look at the cosmology of economics, you’ll see that the two branches of modern economics and the two political parties in this country have much in common with each other, while neither one really has “the answer”. Continue reading →

You may not have noticed it, but at the Town Hall debate on October 16th, Governor Romney torpedoed his own claim that he would give small businesses a break.

What is a small business?

The IRS uses Schedule C to define small business owners as “sole proprietors” of a small business. This is the definition of small business the presidential candidates are using.

Governor Romney defined the small business owner as one who pays personal income taxes on their business income. Not so fast Governor!  Before they even fill out their personal income tax forms, all small business owners pay a tax called the Self Employment (SE) tax. Continue reading →

Could America have had hundreds of thousands more jobs by now than it does? You bet it could! Here’s an example of how one complex and obscure institution is being used by Congress to hold jobs for Americans hostage.

The US Export-Import Bank 

Ours is not the only Export-Import Bank in the world, but it is the most significant in terms of its financial impact on all parts of the globe. According to the Bank’s own web site, “Global Access for Small Business is a top priority of Ex-Im Bank”.

The Bank focuses on US small businesses who create goods for export abroad. The list of “Expenditures” on the map on ExIm’s home page bears this out. Most of the Bank’s assistance goes to our small businesses.

And the Bank is quite successful too! According to the Sacramento Bee this week [the link goes to updated report]:

In the past five years (from Fiscal Year 2008), Ex-Im Bank has earned for U.S. taxpayers nearly $1.6 billion above the cost of operations. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.

Ex-Im Bank approved $32.7 billion in total authorizations in FY 2011 – an all-time Ex-Im record. This total includes more than $6 billion directly supporting small-business export sales – also an Ex-Im record. Ex-Im Bank’s total authorizations are supporting an estimated $41 billion in U.S. export sales and approximately 290,000 American jobs in communities across the country.

And there is more. On the ExIm.gov home page, the flashing banner reads “Ex-Im Bank Sets Record of $500 Million for Minority and Woman-Owned Business Support”.

So, why did the headline in the Financial Times for March 21, 2012 (p4) read “Export finance dispute divides Congress”? Continue reading →