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| http://www.gilder.com/ | Issue 320.0/December 14,
2007
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HEADLINES:
- The
Week / George Gilder: Devastating Damage
to Capitalism
- Friday Feature / Steve Forbes: Powerful Peace Weapon
- Friday Blogger Bonus / What could Apple
do with its cash ?
- Readings /
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The
Week / Devastating Damage to Capitalism
George
Gilder, Gilder Telecosm Forum
(discussing Dick Morris’s “Huckabee is the Right Wing's Last Survivor” on http://www.realclearpolitics.com/):
"Total income tax burden," gauged in terms of revenues by Morris,
shows that Huckabee and Morris have no grasp of tax policy. Low rates produce a
larger "burden" by that measure because low tax states attract
businesses and population and thus increase their revenues faster than high tax
states do.
Fiscal conservatism has become a new term for a high tax leftist, which is what
Huckabee is. Low revenues for Arkansas under Huckabee reflect a ridiculously
high 7 percent state income tax. Huckabee would compound with protectionism the
damage caused by his fiscally conservative view that he has to raise tax rates
to pay for government services.
Huckabee is a fanatical opponent of supply side economics, as is Dole (I worked
for him and it is consuming hatred). Huckabee believes capitalism is based on
greed ("Club for Growth is the club for greed" is his idea of
devastating repartee). Clinton was actually better on taxes and protectionism,
the two key issues beyond the war on terror. The fact is if we raise tax rates
and tariffs to fight the war on terror we will fail to generate the revenues and
technologies that can win it.
I agree with Huckabee on social issues, but the President has virtually nothing
to do with them. A protectionist president, though, would have a crushing
effect on our economy by reinforcing the necessarily protectionist bias of a
Congress supported by existing companies in Congressional districts.
Protectionism would inflict devastating damage on capitalism around the world,
which is more important than democracy (democracy without capitalism is
meaningless because without capitalism there are no sources of power outside
politics).
Conservatives on social issues are just pols who come from conservative states.
None of them will take a position on social issues unless it is supported by a
poll. Polls are the central problem of our democracy, inducing politicians to
steer by meaningless phantoms in their rearview mirrors.
To read more posts by
George Gilder and the Gilder Telecosm Forum members,
visit http://www.gildertech.com/ and
log on today.
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Friday Feature / Powerful
Peace Weapon: Free-Market
Prosperity
Steve Forbes, Forbes magazine
(12/24/07): Middle East peacemakers
should take a cue from what's been happening in Northern Ireland. The dispute
there between Protestants and Catholics has been bloody and has lasted for more
than three centuries. Yet there now seems to be real progress toward peace.
Why? Not because diplomats suddenly became more able but because of the profound
changes to the south, in the Republic of Ireland, which for centuries had been
one of the poorest economies in western Europe.
Things started to
change dramatically in the 1970s. Dublin aggressively courted foreign
investment, using tax cuts and tax holidays as bait. Other tax and regulatory
changes were made. Result: Ireland today is the most vigorous economy in
western Europe. Its per capita income is now larger than that of Britain,
France or Germany. The great boom in Ireland did not go unnoticed in the North,
and in fact that region has benefited greatly from the Republic's prosperity. A
vigorous, new middle class is rising in all of Ireland. As people become more
prosperous they tend to focus on bettering their lives more than on blowing up
their neighbors.
One of the things
our diplomats should be pressuring Mideast countries on is economic reform.
That does not mean the IMF, whose economic prescriptions of devaluation and
higher taxes are always toxic. Instead, we should be firmly advocating genuine
changes that will bring about prosperity. One would be a Hong Kong-like flat
tax. Another would be currency boards, such as Estonia's, or a variation of
one, such as Latvia's, which have stabilized the once inflation-prone
currencies of those two countries. More reforms could be taken from the World
Bank publication Doing Business, which surveys 178 economies on
everything from the ease of setting up legal businesses to enforcing contracts.
It's no surprise that most Mideast countries (as well as African ones) are
economic laggards. One happy exception is Egypt, which seems to be making real
progress in instituting pro-growth policies. A vibrant middle class, long term,
is the key to genuine and lasting peace.
Something we
should have pushed at the recent Middle East peace summit in Annapolis, Md. is
for the Palestinian government, such as it is, to enact pro-growth policies.
Israel has made
significant changes--especially under Benjamin Netanyahu, who was finance
minister (2003--05)--but it could do a lot more, including instituting a
low-rate flat tax. Until recent years, in fact, Israel's economy was grossly
overregulated, overtaxed--hardly an inspiring free-enterprise model. The faster
it can move to a Hong Kong/Estonia/Switzerland model, the better for its own
well-being and security. A free-enterprise boom would be noticed by neighbors
and quietly emulated….
Read on:
http://www.forbes.com/forbes/2007/1224/023_print.html
________________________________________
Friday Blogger Bonus / What could Apple do with its
cash in hand?
Technovia (12/8/07): The first
reason an Apple bid for the spectrum makes sense is a practical one: this may
be the last time that a major piece of US spectrum is available, at least until
one of the incumbent telcos goes bust. If Apple was at all interested, now
would be its best opportunity.
However the
second, deeper, reason is more strategic. Personal data communications is
finally having its version of what George Gilder dubbed "The
Negroponte Switch" (after Nicholas Negroponte), something which Negroponte
later referred to in his book "Being Digital". Thanks to higher data
rates with 3G (and beyond) services, small devices no longer need to be
tethered to a PC in order to access and update information. Amazon's Kindle is
a great example of this: with Kindle, you need never hook it up to a PC in
order to get maximum use from it.
Compare this to
Apple's strategy with the iPhone, which, while perfectly usable on its own,
functions best as an adjunct to a personal computer (and preferably, of course,
a Mac). Apple has remained steadfast in its adherence to the "Digital
Hub" plan which Steve Jobs outlined in 2001, despite the challenges of
network-based computing services such as the ones launched by Google, in the
shape of Google Docs, or Yahoo!'s Flickr….
Read on:
http://www.technovia.co.uk/2007/12/what-could-appl.html
Check out the Technovia blog:
http://www.technovia.co.uk/
__________________________________________
Readings /
Samsung's New Home
Theater-in-a-Box (HTiB) Powered by Sigma Designs
http://www.broadcastnewsroom.com/articles/viewarticle.jsp?id=257545
CPI increases 0.8% in
November (PDF)
http://www.ftportfolios.com/Commentary/EconomicResearch/2007/12/14/CPI_increases_0.8Percent_in_November
Plastic Computer Memory's Secret Is Gold Nanoparticles
http://www.spectrum.ieee.org/dec07/5769
AMD Vows Not to Repeat Missteps
http://online.wsj.com/article/SB119758417785527807.html?mod=technology_main_whats_news
Weekly GTI Index
http://www.gtindex.com/
Screen Maker Sees Growth in '08
http://online.wsj.com/article/SB119748484586224143.html?mod=OATE
__________________________________________
Friday Letter Editor: Mary Collins George / mcollins@gilder.com
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