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Warm regards

By Tom Toles

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Pumpkin, or mincemeat?

Maybe the reason I'm starting to like two-sentence stories about flying pumpkins is because regular news stories are too convoluted to understand. This story in the Times on Sunday left me bewildered about several things.

It's a story about inflation in China, but it doesn't even MENTION the undervalued Chinese currency, which I understood to be part of the problem, if not the whole of it. Then in the fifth paragraph, it says one of the causes of the inflation is full stores! I seemed to remember that the definition of inflation was too many dollars (or Yuan? Or Renminimbinimiminbi?) chasing too few goods, which a later paragraph actually says! Full stores sounds like PLENTY of goods, unless it means stores full of shoppers and no goods!

While I was waiting for the story to sort that out, it threw me another curve. It said that salaries in China for college graduates were FALLING, because there were so many of them! Now this is interesting, because the plan here in the U.S. is to get more people to graduate college, because college degrees will pay MORE. Now is it because the skills are WORTH more, or because it's just another supply-and-demand situation? I don't know, and perhaps I never will, but I DO know how far the pumpkin went, and it was farther than most economics stories get me. --Tom Toles

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By Tom Toles  | September 15, 2010; 12:00 AM ET
 
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Comments

"Not when the VALUE of said items is below what the ACTUAL cost is..."

Not exactly a sustainable way of doing things, and yet... it is China purchasing the bonds we float to cover our debt and not the other way around. Somebody is definitely blowing smoke up somebody's skirt, but the invisible hand of the market always gets the last laugh.

Posted by: jonroesler | September 16, 2010 3:31 PM | Report abuse

"When demand is up (stores are full of shoppers who want to buy things), prices can (and logically should) be increased to whatever the market will bear. And, voila, we have inflation"

Bull...Not when the VALUE of said items is below what the ACTUAL cost is.
Yet the "wheel" continues to turn.

Posted by: bertzel | September 15, 2010 10:30 PM | Report abuse

The article said retail sales in China are up 18.4%, indicating that demand is up. When demand is up (stores are full of shoppers who want to buy things), prices can (and logically should) be increased to whatever the market will bear. And, voila, we have inflation.

Posted by: jonroesler | September 15, 2010 4:57 PM | Report abuse

Just doing a little sanity check here... IF the top 1% pay 40% of total federal taxes, and I'd be interested to learn where that 40% figure comes from (other than talk radio), doesn't the fact that they control 43% of total wealth still leave them undertaxed? On a wealth vs. tax basis, some simple math (43%/40%) tells me the wealthiest 1% are undertaxed by at least 7.5%.
This ignores entirely where the money comes from. Which brings us to the question...

Why is earned income taxed at a higher rate than investment income?
It's been said that taxing investment at higher rates will discourage investment. If that's the case, and I don't believe for a moment that it is the case, does it follow that we, as a nation, are by taxing earned income at higher rates than investment income indeed trying to discourage work?

Would a person be less likely to invest money that could, I don't know... be buried in a coffee can or stuck under the mattress... if the interest earned was taxed at the same rate as the income some of us have to actually sweat in order to earn?

Posted by: jonroesler | September 15, 2010 4:41 PM | Report abuse

@ PrarieDog60 - Your statement about a continuous growth economy pushing us closer and closer to economic and environmental ruin may be closer to the truth than you think.

In the physical sciences, equilibrium is measured by the amount of order/disorder (chaos) in a system. Ironically enough: chaos is favored.

So, we may be pushing ourselves closer and closer to the brink of disaster, but unfortunately, that's just the nature of things.

Posted by: amethystmarbles | September 15, 2010 2:47 PM | Report abuse

In Argentina in the 80's the joke was: "Now that he has his engineering degree, he can finally become a cab driver!" (it was a joke because the alternative was suicide, I guess).
Yes, supply and demand also work for college degrees, if there are not enough jobs to absorb the newly minted graduates. I am a chemist, and moved to the US after graduation for that very reason...

Posted by: numas | September 15, 2010 11:14 AM | Report abuse

Economics is a tough one. Even Nobel economists disagree with each other on many things. So I'm not surprised a story on economics was slightly cloudy.

I'm still trying to figure out how any sort of "continuous growth" model of economics is remotely sustainable. But no one wants to talk about that. If we looked that beast in the eye, we'd realize that our reality is built on inevitable collapse, both economically and environmentally.

Posted by: PrairieDog60 | September 15, 2010 10:48 AM | Report abuse

Speaking of rich people, 7 of the top 10 richest in the House are Democrats. Hmmmmm.

Obama and the Democrats are driving that car over the cliff, if we don't get fiscally conservative candidates elected to DC to stop them.

November can't come soon enough!

Posted by: janet8 | September 15, 2010 10:06 AM | Report abuse

Cynical C....... bravo...!!!
What a perfect example of the numbskull general population that has swallowed "the message" that the lib media has fostered at every turn. Evil=rich.... they grab "wealth" from all the poor working-class shlubs... corporations=negligence...unions=noble advocates... You've learned the lessons well... you're right smack in the middle of the liberal plantation where you should be.

That "evil" top 1% provides 40% of the revenue to run this massive government machine, while approaching half the general population pays NO INCOME TAX at all. Sounds UNSUSTAINABLE to me.... that means "can't go on forever" for you poor media-fed drones.

Posted by: Shrimper | September 15, 2010 10:01 AM | Report abuse

What this really should tell you Tom, is that there is way too much ignorance on BASIC economics, both in the general population and in journalism. Not to mention the overall dumbing down of the journalism "profession" in general, which seems quite evident to me. An editor with any real sense or competancy would have handed that article back to reporter and said, ".. try again.".. then again, the goal is no longer typically about getting it right or complete, just get the right message out; sadly, even I can't tell you what that was is this case.

Posted by: Shrimper | September 15, 2010 9:43 AM | Report abuse


Actually, the basic economic story is easy to understand: The U.S. Treasury creates interest-bearing bonds and trades them for federal reserve notes, which the privately owned corporation known as the Federal Reserve conjures ex nihilo.

Then you and I pay the interest on the bonds, aka the national debt.

Instead, the Treasury could just issue its own tender, interest free, and we'd have no national debt.

But that would be TOO easy.

Posted by: HumanistPatriot | September 15, 2010 9:40 AM | Report abuse

I'm not convinced that the rich get rich by "working hard." I think they get rich by being willing to grab a dollar every chance they get, whether fairly and responsibly or not. They are not decent people.

Much work has gone into vilifying unions, but now that the evidence is in, we see that the unions were the engine of the robust middle class. Trickle down never happened from the ultra wealthy, but it did happen from union labour. When our communities had good-sized blocks of unionized workers, we all enjoyed more prosperity.

And as for lawyers, I guess they're only bad when they're fighting for justice for people whose lives have been turned upside down through corporate negligence or irresponsibility. The rich spend more time in court and use lawyers more than anybody else. They are hardly litigation averse.

We are in a class war, and it looks like the richest 1% are winning. But are they? Or does it just look that way because they own all the looking glasses? Most know the truth that anyone who makes it into that 1% is a repugnant, morally bankrupt excuse for a human being. We should pack them and their money up and exile them to somewhere where everyone else is just like them. Any bets they'd eat each other alive? Hey, problem solved.

Posted by: CynicalC | September 15, 2010 8:51 AM | Report abuse

And what friends do the Democrats invite into their hot tub? Union bosses and trial lawyers. The rich pay the highest percentage of the taxes in this Nation. Why does the Left hate the rich? There are plenty of rich liberals. Of course they feel guilty about being rich. They feel guilty about being American. And they absolutely fear those who envy them. Of course the left paints rich people as greedy. Self made rich people are more ambitious than greedy. Greed comes now from Union bosses that don't want their members to share in the sacrifice required in this economy. Greed comes from trial lawyers who want no restrictions placed on their ambulance chasing. The rich that worked for their wealth produce, hire, and spend. Union bosses and trial lawyers get their wealth from bilking the American public with the help of the Democrats.

Posted by: bobbo2 | September 15, 2010 8:05 AM | Report abuse

And what friends do the Democrats invite into their hot tub? Union bosses and trial lawyers. The rich pay the highest percentage of the taxes in this Nation. Why does the Left hate the rich? There are plenty of rich liberals. Of course they feel guilty about being rich. They feel guilty about being American. And they absolutely fear those who envy them. Of course the left paints rich people as greedy. Self made rich people are more ambitious than greedy. Greed comes now from Union bosses that don't want their members to share in the sacrifice required in this economy. Greed comes from trial lawyers who want no restrictions placed on their ambulance chasing. The rich that worked for their wealth produce, hire, and spend. Union bosses and trial lawyers get their wealth from bilking the American public with the help of the Democrats.

Posted by: bobbo2 | September 15, 2010 8:05 AM | Report abuse

Re: "Top 1%..."
Your figures are exaggerated. The top 1% pay a little over 20% of all federal taxes, and their share declined under Bush. I ask you, who benefits the most from the protection provided by our huge military, Bill Gates or the guy flipping burgers at McDonalds? Who benefits most from our super highways leading to international airports, Donald Trump or worker who takes his family out to eat at Burger King?
It was not all work and brains that earned Bill Gates his vast fortune. A little luck was involved as well. When fortune smiles upon you, and a country gives your the opportunity to excel, then you should be willing to give back at a higher rate than the average Joe. Its not redistributing the wealth, but paying your proportionate share for the benefits received.

Posted by: gss49 | September 15, 2010 8:05 AM | Report abuse

It is just a matter of being fair. If we have a surplus we can cut taxes. But if we do not have a surplus - we can not afford the tax cut. Not now, anyway.

Paying our bills will help the economy recover.

Posted by: GaryEMasters | September 15, 2010 6:51 AM | Report abuse

Superb cartoon, Mr. Toles. Bravo!!!!

Posted by: marecek | September 15, 2010 4:58 AM | Report abuse

As Ochham may have said, "the more you say the less people understand what you said".

About "footsie soldiers" I would like to say that anyone who does NOT understand that the Republican Party is the Rich Man's Party has a problem with zero comprehension.

On the other side of the coin; anyone who believes Obama "Feels the Pain" of people without paychecks also needs a reality check. Obama has given only lip services to the unemployed and provided hard cash to the rich and greedy.
It is the "demand side" of economics that has insufficient funds to support the supply side of economics and everything else. It is the "supply side" of economics that is raising prices and decreasing wages, destabilizing the economy and forcing unemployed/underpayed people into poverty.

Posted by: OchamsRazor | September 15, 2010 2:21 AM | Report abuse

Maybe the problem with these articles is that the paper is using summer interns to produce them. I noticed this summer that interns were writing Washington Post articles. Maybe in some cases they did a great job, but nevertheless at the end of the day they are just beginners. It seems there is a trend for offices to rely on interns more and more as they can no longer afford to pay for regular employees. That's the case in my office.

Posted by: moore_te | September 15, 2010 12:44 AM | Report abuse

The top 1% of producers/taxpayers provide nearly 40% of all revenue to the Federal government to pay for everything the government provides. All citizens and illegal immigrants should be thanking the top 1% for all they do every day for them and this country, but people who Toles promotes want to be the ones on top and control how everyone lives just like they tried to do back in the USSR. "You don't know how lucky you are, boy Back in the USSR, yeah?"

Posted by: jornolibist | September 14, 2010 8:54 PM | Report abuse

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