Pesek Pines to Pen On Pink Print

Bloomberg columnist William Pesek is clearly gunning for a job at that pink foreign newspaper, otherwise known as the Official Overseas Journal of Rubinomics, with a silly column today going after Hong Kong's plan to reduce taxes. The first tip that Pesek doesn't know what the hell he is talking about comes from the title of the column, "A Tax Cut Even Milton Friedman Might Not Like." Nevermind that one of Friedman's most well-known quotes is "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible." No big deal that though, an inadvertant face-mask, only five yards. Read on and it is clear that Pesek pines to be printed on that lovely pink newsprint for his true complaint is - wait for it - income inequality! How could Hong Kong be considering cutting taxes when something called the Gini coefficient reflects Hong Kong's shamefully unequal distribution of income throughout society? (0.5 on the Gini versus the 'correct' level of 0.4...Egads!) Could it be perhaps to maintain competitiveness as a business center against formidable competitor cities like Singapore, Sydney, and Shanghai? Well yes, and Pesek even says so, but that is no excuse to him. Hong Kong needs to be plowing dough into environmental protection (gotta get the Al Gore angle in to fit with the news of the day), schools and hospitals and doing something for all those poor people (the poor that moved to HK from the mainland to get jobs and live in relative freedom). Furthermore says Pesek, tax cuts are only for a slowing economy, not for good times. It is easy to see how Pesek could come to believe this - tax cuts have historically been applied to slowing economies because they work and it is only in desperate times that most politicians, with their proclivities to desire greater resources at their disposal, turn to them - but it doesn't speak well of his grasp of the economic theory.

Among the other head-scratchers is "Hong Kong can't thrive without upping spending on education to create that talent." Fine, education can seed a society with talent, but you can also secure talent by importing it, by making life attractive in your city, like maybe with...low taxes. In fact that has been Hong Kong's strategy throughout its history, it has been a talent magnet, taking all comers and letting their talent rip.

Most of the rest is standard income inequality golden oldies - generous minimum wages and retirement benefits. Can't you just hear those Chinese peasants in their impoverished villages, "I think I'll move to Hong Kong because it is such an egalitarian place and they're spending big dough to clean up the air." Ah yes, forget about food to eat and shelter over my head, give me clean air and a fat pension!

As for Pesek making it to the FT? This was a very solid showing for him, a fine effort indeed. It is just that he lacks the star power of a Larry Summers or a Steve Rattner. Still there is hope for young William yet.