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Archive for the ‘Economy’ Category

Two years ago Salon.com praises the fiscal policy of Argentina for expansive monetary policy of fiat currency manipulation, national macroeconomic policy and nationalization of key industries:
http://www.slate.com/articles/business/moneybox/2012/05/spain_greece_and_portugal_should_quit_the_euro_it_s_the_only_way_to_save_their_doomed_economies_.html

Two  years ago Paul Krugman, progressive economist and influential New York Times columnist, praises Argentina for the same things:
http://krugman.blogs.nytimes.com/2012/05/03/down-argentina-way/?_php=true&_type=blogs&_r=0

Krugman and Salon have long supported expanding similar economic policy in the U.S., and two years ago the Cato institute calls them out on this:
http://www.cato.org/blog/krugmans-love-affair-kirchner-model-argentina

Two years pass.  What’s happening right now?

Argentina is defaulting:

http://www.bloomberg.com/news/2014-07-30/argentina-defaults-according-to-s-p-as-debt-meetings-continue.html

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I recently posted on Facebook about an article explaining how the current Welfare system actually keeps people in poverty.

The article is at:
http://www.theblaze.com/contributions/sorry-cnn-and-david-wheeler-but-a-basic-income-wouldnt-end-poverty/

I asked friends to take a moment to read this and explained that if they would digest and understand this, they might never vote for a welfare advocating candidate again. In fact, if they realize that the one Trillion dollars we borrow every year to perpetuate the welfare state is also a direct tax on the poor – because the poor have to pay more for goods and services in the form of inflation due to artificial increase in the money supply – they’d realize that our current policy as a nation right now is literally insanity.

A friend wrote back saying he thought I was blaming poverty on the poor. He explained that he’s been able to lift his own family out of poverty through hard work.

I wrote him the following:

I’ve done the same thing in my life, although I didn’t have a family early and I relied on my parents instead of the government during the early years. The fact is that using government as a charity doesn’t make sense because government is just about the most inefficient charity on the planet. Much of the money goes towards overpaid bureaucrats and a lot of it also gets funneled back into progressive PACs and lobbying to sustain the current system of borrowing a Trillion dollars a year. The debt from doing this for just the past five years is going to hamper attempts at future prosperity for all Americans for decades, regardless of their income tier.

Seven of the richest 10 counties in the U.S. surround Washington D.C., and it’s directly related to federal bureaucratic positions:
http://www.washingtonpost.com/local/seven-of-nations-10-most-affluent-counties-are-in-washington-region/2012/09/19/f580bf30-028b-11e2-8102-ebee9c66e190_story.html

The top political donors of the past 25 years have been almost entirely Democrat instead of Republican, and much of the money has been recycled government money being channeled to progressive groups who make a living off of some of the money and funnel the rest back into PACS and lobbying. Note that the Koch brothers are number 59 on the list, despite the current Democrat talking points trying to blame all conservative voices on them. Note also that none of the top 16 donors of the past 25 years have been Republican:
http://www.opensecrets.org/orgs/list.php

The problem has gotten so bad that we now have a situation where only 86 million full time private workers are supporting 148 million benefits receivers in our nation. That’s a ration of 1:1.7, each worker supporting almost two benefits receivers:
http://www.cnsnews.com/commentary/terence-p-jeffrey/86m-full-time-private-sector-workers-sustain-148m-benefit-takers

In fact, the U.S. spends/borrows enough each year to outright eliminate poverty, but because of government inefficiency and because of the way poverty is measured, no one is ever removed from the roles of poverty despite this spending. We’re not even making a dent in people’s lifestyles.
http://www.forbes.com/sites/timworstall/2012/09/13/if-the-us-spends-550-billion-on-poverty-how-can-there-still-be-poverty-in-the-us/

….People are not lifted out of poverty by money in society, but by goods and services. People benefitting from government welfare are not producing goods and services. And people in the government running the welfare apparatus are providing very little goods and services for society in terms of helping the truly needy. Most of their efforts simply consume the fruits of people who are working in the private sector and go towards perpetuating the system. It would be much more efficient and cost effective to return these bureaucrats to the private sector where they could produce real goods and services and to simply have something like a computer route government aid to the truly needy that qualify for a safety net. This would benefit everyone.

Neither the people on the roles of welfare nor almost all of the welfare bureaucracy in Washington D.C. are contributing goods and services to society. That is a significant part of the equation of our current economic stagnation. A meaningful percentage of the population is only consuming.

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A friend of mine posted a quote by Peter Singer on Facebook recently and I composed a response.  I thought it would be a good idea to share both here.

The quote from Peter Singer was:
“The capitalist economic system, regarded by the classical economists as natural and inevitable, is an alienated form of human life. Under capitalism workers are forced to sell their labour . . . to the capitalists, who use this labour to accumulate more capital, which further increases the power of the capitalists over the workers. Capitalists become rich, while wages are driven down to the bare minimum needed to keep the workers alive.”

My response was:
“Ever wonder why the same people who believe Capitalism will sell them the rope to hang itself (Vladimir Lenin) also believe that religion is the opiate of the masses (Karl Marx)?  Ever wonder why everywhere you have communism and collectivism take root you also have persecution of the church?  Herb Titus, famed lawyer, graduate of Harvard Law, and head of a couple of law schools himself, addresses the logic behind Peter Singer’s quote about Capitalism in his book ‘Biblical Principles of Law’.  In the section on Fault, he talks about Lincoln Steffens, a man [a century ago] who would go around to major cities in the late teens and early 20’s lecturing to civic leaders about corruption.  Steffens would teach that church leaders are wrong, because in the Bible Adam blamed the woman, the woman blamed the serpent and church leaders stop there.  ‘The devil made me do it.’  But the real problem, Steffens would share, was the apple of temptation.  Remove the temptation and you would remove the problem.  Capitalism with it’s economic incentives, he believed, was the problem.  Lincoln had visited the young Soviet Union and praised it because he believed it would produce the most general prosperity and be the least corrupt system of any on the earth.  He famously wrote, “I have seen the future, and it works!”  Of course we know the Soviet Union became one of the least prosperous, most corrupt systems on earth.  The problem wasn’t the apple of temptation, and good church leaders don’t blame the serpent.  The problem is mankind and sin nature.  In the same way, the problem with economics is not the incentives of Capitalism, it’s the corruption of mankind.  The idea that mankind is flawed and needs checks and balances is classically called the concept of Natural Law, or to put it differently, the law of mankind’s nature.  Natural Law and the English Common Law both looked to Biblical Law as the rule for controlling mankind.  The final six Ten Commandments were considered the rule for keeping mankind in check.  Inherent in this was also the idea of just rewards – each man is individually responsible for their actions, and reaps blessings or curses as they exercise individual liberty.  The Enlightenment – Marx, Freud, Darwin and Kant – turned this idea on it’s head.  They believed man was simply and only a product of genetics and his environment.  Mankind doesn’t really have freewill because everything we do is pre-determined by chemicals and stimulus.  As such, individuals are not responsible for their actions, society is.  All of society must pay for the wrongdoing of each individual.  And so Enlightenment thinking embraces the concepts of societal insurance, central [social] planning and the idea that good of the collective takes precedence over individual life, liberty and property.  At the heart of this is the belief that if we can just change mankind’s environment, we can change mankind.  If we can just remove the apple of temptation, we can experience Eden once again.  It’s the age old lie, ‘ye shall be as God’.  But the problem is not the environment, the problem is sin.  The problem is us.  And to the degree that secularists stop holding individuals accountable for individual actions and instead try to deal with society as a collective, a nation experiences increasing uncertainty and injustice both in the economy and in the courtroom.  Herb Titus’ treatment of this subject is brilliant, and is online at:  http://www.lonang.com/curriculum/5/s51.htm

The exchange reminded me of President Regan’s Address before the Assembly of the Republic of Portugal in Lisbon on May 9, 1985

President Regan said:
“…Yes, democratic Portugal has faced political problems and social problems and economic problems, and, no, democracy, particularly in its earlier years, does not always go smoothly.  But this is true of any nation and especially any democracy. In my country, we’ve learned over and over again that democracy can only work when it is judged not in the short run but over the long term, when we keep in mind the principles upon which it is based and remember how right Winston Churchill was to remind us that democracy truly is the worst form of government, except for all the others.  The essential truth at the heart of Portuguese and American democracy is our belief that governments exist for the sake of the people and not the other way around. And this belief is based on an essential insight of our civilization—the dignity of man, the value of the individual. My own nation’s forefathers justified our revolution with these words in the Declaration of Independence: ‘… all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.’  Well, it is this trust in the individual—the right to speak, to assemble, to publish, and to vote, even to walk out—that is the meaning of democracy. Our democratic governments are not built on the proposition that the people are always right; indeed, within the structure of our governments there are safeguards against the whims or passions of the majority. But democratic government is built on the proposition that there resides in the common people an uncommon wisdom, that over the long run the people and their right to political self-expression are the best protection against freedom’s oldest and most powerful enemy—the unchecked growth and abuse of the power of the state…”

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Recently Josh Bivens penned an editorial for CNN asserting that, “It’s OK to add to debt to grow jobs.”

In the past three and a half years we have gone 5 trillion into new debt and we’ve lost 4 million jobs net.  If we had simply used that 5 trillion to hire people directly we could have paid 20 million people 60 thousand dollars a year to each be employed for all 4 years Obama was in office.  Instead, we have minus 800 thousand employees per trillion spent.  (As Reagan said, “It would seem that someplace there must be some overhead.”) 

Yet liberal academics such as Krugman and Bivens keep advocating Keynesian economic theories and asserting (paraphrase), “If only we had spent a little more money, then our theories would have all worked out…”  Economists like this always have a reason to offer for why reality is wrong and why their theories are still correct.  But we aren’t dealing with a theory here.  Minus 800 thousand employees per trillion dollars of debt spending is reality.

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I saw two editorials today by liberal Keynesnian economists which leave me thinking they have completely lost grip with reality.  One was titled, “Obama Has a Jobs Plan.  Romeny Doesn’t.”  The other was titled, “It’s OK to Add Debt to Grow Jobs“. 

Let me make this very simple.  Obama’s Jobs Plan has only one number that counts.  In the past three and a half years that Obama has controlled the economy – and for two of those years he enjoyed the triumvirate of a Democratic House and Senate, and got pretty much everything he wanted – the nation has added a net gain of minus 4 million jobs. 

We have gone 5 Trillion dollars into debt and the number of Jobs we’ve grown is negative 800,000 positions per trillion dollars spent.  That is the truth.  

That is Obama’s Jobs Plan.

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