Clemson has five sub shops in Downtown, three of which are national chains. These chains are everyone’s favorite. I, however, much prefer going to the local sub shop. To me, it is about supporting the local guy. Of course, subs are just an example. I feel this way about other commodities. I would rather buy my bread from a local bakery and meat from a butcher, etc (and I would, if there were such things in Clemson). I think the food quality is better; and did I mention that I like to support the local guy?

I am sure this rhetoric is nothing new. You have heard it a thousand times from a thousand hippies. The point of this rant focuses on this:

Wal-Mart just opened in our small town, despite the huge movement to keep it out, involving re-zoning, legislation etc. Even though I am all for the small guy in most cases, I was on the other side of the fence with regard to Wal-Mart. If I were to join the bumper sticker/yard sign crowd I would have made a sign that said, "I support Wal-Mart’s right to open in Clemson". Acquaintances who are sick of my boycott of fast food chains have argued with me that this stance is contradictory. I don’t think it is.

I have expressed feelings similar to the ones I have about Wal-Mart before in other rants, but felt my message was lost because the example I used was too controversial. It’s not uncommon for people to attempt to force (via laws) others to adopt their ideas. In the long run, it never works. In my opinion this "legislating beliefs" approach is the definition of anti-Americanism (more so than any person opposing a war). You can, and should, try to inform, teach, and convince others that your opinion is right. But the second you try to force your convictions on others through legislation (re-zoning) you have chosen the wrong path. Think about it: If you have successfully convinced people that Wal-Mart is bad, then you should feel comfortable with Wal-Mart opening a store near you. If you were right, then no one will shop there; it will go out of business and close. Mission accomplished. However, if people wish to shop there then it is their choice, and who the hell are you to pass laws denying them that right?

I hope more people buy from the local guy. It is a better choice, in my opinion. However, I do not think that Wal-Mart is evil and I support Wal-Marts right to open in any town in America. People, make your own choices. Inform others, but do not pass laws forcing them to conform to your opinion.

P.S. Due to my fast typing I found out that "Wal-Mart" is in my word processor’s spell check dictionary. Coffeeman’s Bakery was not.

I walked into a conversation the other day in which a lady claimed she hates economists because they or their beliefs are bad for the environment.

Think back 100 or 200 hundred years ago. We the United States cut down just about every tree on this continent. We polluted the environment more than any entity ever. We sacrificed species of animals left and right and finally caught an entire river on fire. Everybody that partook in those practices knew they were harming the environment and knew that doing so was not good. Trust me any person knows it is bad to outflow your petro waste into a river. So why did they do it?

Because they were poor! This country did not start off as the richest in the world. We started off struggling the same way many countries are today. When our forefathers were faced with the choice between putting food on the table or saving the life of a spotted owl, (logging has endangered the spotted owl yet many of our forefathers made a living through logging) guess what they choose? And probably rightly so.

Because of this exploitation and past lack of concern for the environment our country prospered and our standard of living was elevated considerably.

Similar stories can be told of any industrialized and developed country.

We, citizens of these fortunate countries, are now able to sacrifice production and economic advancement to be more environmentally aware. Our choice is no longer "spotted owl or dinner". It is more like "spotted owl or bigger SUV". We have chosen to raise awareness and pass environmentally protective laws. These laws have slowed the continual rise of US per capita income and standard of living (bigger SUV) but we have all decided it is worth it, now.

But do not kid yourself. The difference is not that we are more environmentally aware than before, it is that we can now afford to be environmentally aware. So you can thank economic development and the economist working so hard for you. Economic development is the reason we have come to be environmentally aware.

In addition, economic development is the only way to get other countries/all countries to be environmentally aware. Citizens of developed nations look to developing nations such as Mexico, African countries, and other underdeveloped nations and ask: "How can you clear-cut your rain forests?" "How can you pollute the way you do?" "Why do you not have environmental laws?" Remember that they are only asking those questions while they are sipping on their Passion Fruit and Kumquat blended juice at an outdoor cappuccino/sushi bar. These developing nations are doing exactly what we did 100 years ago. They will continue to do it until they can afford not to do it. Therefore if you want to help the environment then help these nations develop economically (become an economist).

BTW, A new McDonalds creates available jobs, which in turn raises employees standard of living, which in turn helps the environment. So save the environment and build a McDonalds in Rabat, Morocco

The previous discussion of deficit spending leads nicely into this rant about my feelings on tax cuts.

Spending that is carried out by a government is funded by two things: 1) government revenue and 2) debt financing. Capitalist governments, such as that of the United States of America, raise revenue by taxing its citizens. In my previous post I addressed the ills of deficit spending by personifying the US Central Bank and economy. I asked you what you would think about a person (in this case, the US Central Bank) who keeps borrowing more and more money every year. Lets expand that analysis: What would you think about a person who continues to borrow more money and then asks their employer for a pay cut, hence decreasing their revenue? Now consider if, with all of these ill-advised financial decisions, this individual decides to spend/buy more things then they ever have before. Wow! Welcome to President Bush’s Tax Cut 101.

President Bush’s tax cut is a reduction in government revenue. Now that is fine with me. Let the government collect fewer taxes from me and decrease their revenues, as long as they decrease their spending also. That would be the logical thing to do, right? If you lose your job/lose your revenue, you have to decrease your spending. The Bush Administration has told the American public (and the public’s congressional representatives) that government revenue (i.e. taxes) can be reduced while government spending can be increased. They must have good reasons to assert such a thing, right? Well these are the two main reasons that I have heard: 1) The taxpayer needs this tax cut 2) We need the tax cut to help our struggling economy.

The Taxpayer needs this tax cut
Everyone wants something for free. If I were to offer you a Segway for free, you would take it. Do you need a Segway? Probably not. Would you buy a Segway? Probably not. But if it is offered to you for free, you will take it. I feel that a tax cut is similar. When a politician offers you a tax cut you say, "Sure". It is your free Segway. Did you honestly need it? No. I have not seen the American public cry for it. There are constant demonstrations, protests, marches, and rallies for numerous causes, yet I have not seen a single one for a tax cut. This indicates, to me, that the American public didn’t/doesn’t need a tax cut. Let me also mention that tax rates in a lot of other industrial nations, especially Europe, have much higher tax rates than we do*.

Its good for the economy
This one is fun. First of all, refer to my previous post on deficit spending The Bush Administration’s tax cut has increased our national deficit so all the negatives from that post can be applied here. Here are some new points. Common sense will tell you that debt must always be repaid eventually. Common sense will also tell you that cutting taxes without cutting spending will only increase the debt burden. In other words, in a few years a politician will recognize our astronomical national deficit and they will do the fiscally responsible thing: Raise taxes to balance the budget. So a tax cut today will be followed by an increase of taxes in the future. Think about it. A tax cut gives you money in hand today, but (due to steady spending levels) the inevitable tax increase will take that same money out of your hand tomorrow. Sounds like a loan. In fact that’s exactly what it is; a short-term loan. So with the "perfect" credit markets in the US why does the government need to issue personal loans? (I call the US credit market "perfect" because of its ability to assess risk and supply endless amounts of money to worthy recipients and causes.) The backbone of President Bush’s argument for a tax cut is that this tax cut will increase consumer spending. Why would it? If consumers wanted to spend more they would just take out a loan (think "credit card"). In fact, the point of all points is this: Our taxes have been cut and yet the economy still struggles and consumer spending continues along normal (not accelerated) trends. The increase in deficit spending has hurt the economy (see "Deficit Spending").

So in other words, I see no positive effects of a tax cut, only negatives. So why, WHY would a politician push for one? Are they just malcontent? No, I do not think so. The fact is, a tax cut is always a positive thing to talk about. It is a free Segway. Remember, politicians are always looking to please or gain constituents. The tax cut topic is also a distraction from other less pleasant political issues. One of President Bush’s main goals for his second term is making his tax cuts permanent. Trust me, President Bush would much rather talk about tax cuts then his secret plans for world domination J .

Be wary when someone offers you a free Segway.

If any economist is reading this post, I know a discussion on the IS-LM curves, and the US’s floating exchange rates interaction with monetary policy would strengthen my argument but this is not an econ textbook! (But I haven’t forgotten J ).