The Lefts "Economic Lunacy"

Walter E. Williams exposes the lunacy of the lefts economists belief that society benefits from destruction - some suggestion that the earthquake in Japan will help the world economy. He explains clearly the short sightedness of this view.

He recalls Paul Krugman commenting in 2001 that 9-11 "could do some economic good". His question is thought provoking: "Would the 9-11 terrorists have done us an even bigger economic favor had they destroyed buildings in other cities?"

Think about the ignorance of Krugmans comment!

A Basic Economic Review

Jeff Harding at Minyanville.com gives a clear explanation of why "consumer spending" - say "stimulus" - doesn't lead to recovery, and saving does. A good review of basic economics to help you through this administrations actions.

THERE ARE JOBS, AND THERE ARE JOBS!

As I've aged and become wiser it is clear that most of our political disagreements are semantic problems. The words we use mean completely different things to each side of the arguments. Our politicians do nothing to resolve this problem, either among themselves or with the nation as a whole. This is becoming increasingly detrimental to our system and our country.



Jobs is a fine example. I posit the following:

• There are two types of "jobs":
• INFRASTRUCTURE JOBS - jobs that exist to support the free market economy while it creates WEALTH. Examples: City, County, State and Federal employees including police, fireman, public school teachers, administrative positions, armed services, et al. They consume taxes from the WEALTH CREATING JOBS and do no WEALTH CREATION.
• WEALTH CREATING JOBS - jobs that are created by the free market economy to support the creation of WEALTH. These are all jobs that support the WEALTH CREATION segment of the economy - not just direct producers, but including all of the direct support. Example: the person on the Ford production line, the accountant in the accounting department, the janitor cleaning the production line, the cook in the cafeteria who cooks lunch for the production worker that he can buy. My practical definition is anyone controlled by a Profit and Loss Statement (this excludes all the INFRASTRUCTURE JOBS - as all are not P & L controlled).

When a Republican/Conservative says "we need jobs" he is referring to the second type job above - this is the "economic" or "monetary/tax" sense of the word "job".

When a Democrat/Leftist says "we need jobs" he is referring to both type jobs above, but tends to emphasize the "INFRASTRUCTURE JOBS" because it is easier to take action and it "feels good" to help people immediately.

They - the politicians - and we talk right past one another, and no one will stop and explain this to their opponents or to us because of the potential of PANDERING to the voters.

We MUST cut back on the INFRASTRUCTURE JOBS (which has increased significantly since the beginning of this downturn) and we MUST increase the WEALTH CREATING JOBS in order to increase the tax base, thereby allowing us to replace and increase the INFRASTRUCTURE JOBS!

DISCUSSIONS OF THIS WOULD BE APPRECIATED!

IBD v Krugman: You Decide!

Paul Krugman thinks Government spending is the answer.

Investor's Business Daily thinks Krugman is wrong.

Take the time to read both articles and see who you agree with!

Krugman: The Laughing Stock

This is the best summary I've read of Paul Krugman's misguided theories, which the German's are now laughing at - and fortunately - not following! How can he and our administration be so misguided? Even kindergartners know better!

Read Tim Cavanaugh in Reason here.

Wisdom from Steve Wynn

Listen to this 4 minute interview with Steve Wynn, a very successful businessman who explains the problem with this administration and our economy.

Listen to it! It is an important analysis.

UK Budget Cuts

The UK is going through a process we will undoubtedly have to go through in the not too distant future due to current fiscal policies.

The question is how can the current administration read articles like this and watch the turmoil happening while the UK has to reverse identical policies to this administrations, while they blindly continue on the same path as the UK over thel last 2 or 3 decades?

It amazes me!

A Warning from Arthur Laffer

Arthur Laffer warns of an economic collapse in 2011 due to the scheduled tax hikes. His logic seems correct and he backs it up with historical data from 1981 forward.

Do you believe him?

"The Revenue Limits of Tax and Spend"

David Ranson in todays WSJ introduces a chart developed by W. Kurt Hauser 20 years ago that empiracally shows tax revenues will NEVER exceed 20% of GDP! Why? With a 70,000 page tax code more loopholes are searched out as taxes are increased.

So - increase taxes which certainly has the effect of decreasing GDP - and instead of increased income it is reduced! Obama and the CBO cannot see this unintended consequence and it is right before their eyes!

But maybe this is part of their plan: to allow the deficits to spiral out of control and then implement a new non-income related tax - VAT? - to save us!

STIMULUS AND JOBS

Read this and weep! 49 of 50 states have lost jobs since the stimulus was enacted.

Social Security and ObamaFare

The NYT has this article today - an appropriate warning to us all - on the approaching insolvency of the Social Security system. Just what this country needed was a huge increase in expenditures for ObamaFare when our financial future is in jeopardy.


"This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office."


Their last prediction was this would not happen until 2016! Gives you a warm feeling about their ObamaFare prediction!

What Obama's Deficits Mean to our Country!

Investor's Business Daily editorializes on the "Sovereign Danger" in our runaway debt. We should all pay close attention - you can watch the results in Greece, Portugal, et al, today. Do you really want this?

"There Is No Keynesian Miracle"

Paul Johnson, a respected British historian and writer, explains why our administration, Keynes and many leftist economists are wrong. Let's hope they wake up!

Penultimate paragraph summarizes well:


"It would be a welcome change to see a serious contender put forward a basic proposition of economic and financial policy such as the following axiom: "There is nothing essentially different between running government finances and those of a family. The same penalties for recklessness and folly apply to both. And, in both, the same prudence, integrity and self-sacrifice will bring success. Anyone who tells you different is deceiving you.""


Keynesian Economics is self serving to the left, allowing them to acquire POWER at little cost to themselves, as is Cap and Trade and Obamacare.

Bizarre Paul Krugman - the extreme partisan!

WSJ's Best of the Web Today leads Friday's column with a clear example of Paul Krugman's columns are driven not by a Nobel Prize Winners intellect, but by his SUPERSIZE leftist agenda!

Of course, that is why he won the Nobel Prize in the first place!

If you read him, take all his points with a HUGE "grain of salt"!

For Krugman Fans: some insight!

"The New Yorker's profile of former Enron adviser Paul Krugman has some interesting nuggets, none more so than the revelation that Krugman's wife, Robin Wells, has significant input into his column:


When he has a draft, he gives it to Wells to edit. Early on, she edited a lot--she had, they felt, a better sense than he did of how to communicate economics to the layperson. (She is also an economist—they met when she was a postdoc at M.I.T. and he was teaching there.) But he's much better at that now, and these days she focusses on making him less dry, less abstract, angrier. Recently, he gave her a draft of an article he'd done for Rolling Stone. He had written, "As Obama tries to deal with the crisis, he will get no help from Republican leaders," and after this she inserted the sentence "Worse yet, he'll get obstruction and lies." . . .
On the rare occasion when they disagree about something, she will be the one urging him to be more outraged or recalcitrant.


If you've ever thought there's something unmanly about Krugman's rage, now you know the reason why. The anger isn't even his; it comes from his bitter half."





H/T: WSJ Best of the Web Today

Our Friend to the North Issues a Warning we should heed!

David Warren explains the problem we and the world are facing with untethered debt expansion, led by BHO.

An interesting 2 paragraph summary:


"For our governments have created vast bureaucracies, employing immense numbers whose livelihoods depend entirely (whether they realize it or not) upon the capacity of profit-earning people to pay constantly increasing taxes.

It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger."


A great analysis that should be read and understood. Get Ready!

THEY WILL NEVER LEARN!!

Oregon raises their tax rate on the wealthy and businesses. Problem is, this will LOWER income to the state, as has been proven over and over and over and over...! Why? Because the wealthy and the businesses will LEAVE! It is really not hard to understand, except for a concentrated population of lefties - OREGON!

Read about it here.

Clarity from Sowell on Job Creation

Thomas Sowell explains the basic economics of job creation in his "Jobs or Snow Jobs?"

It is easy to understand if you remove your ideological glasses and think about his comments. History even bears him out - note jobless rate with FDR's policies!

BHO is on the wrong track, and the country had better wake up before we truly have a depression!

His two closing paragraphs:

"None of this is peculiar to the current administration. The Roosevelt administration created huge numbers of government jobs during the 1930s-- and yet unemployment remained in double digits throughout FDR's first two terms.

Constant government experiments with new bright ideas is another common feature of Obama's "change" and FDR's New Deal. The uncertainty that this unpredictable experimentation generates makes employers reluctant to hire. Destroying some jobs while creating other jobs does not get you very far, except politically. But politically is what matters to politicians, even if their policies needlessly prolong a recession or depression."

Governments can put people to work - "on the dole" as they say in England - but it cannot "create jobs".

Larry Kudlow Lays Out Reasons to Try Supply Side Economics.

In "The Mundell-Laffer Solution" Mr. Kudlow reminds us that Democrat and Republican administrations have solved our economic problems with supply side approaches in the past (W, Bill Clinton, Ronald Reagan, and JFK) so how about trying it now before disaster strikes!

His final two paragraphs summarize:


"Again, I know I'm a supply-side fossil and a relic of the past. But the Mundell-Laffer policy plan -- which has worked historically for Republicans and Democrats -- could truly save the nation and its economy at this critical juncture. Monetary restraint and the incentives of lower tax rates will solve the dollar and unemployment problems.

In our supposedly post-partisan era, why not give it a try, President Obama?"

The Wisdom of Irving Kristol

Why I like the free market!


"Income Inequality Without Class Conflict, Dec. 18, 1997


It is often said that capitalism—that is, a market economy—is morally obnoxious because its "trickle-down economics" inevitably creates inequality of income and wealth. Now it is certainly true that "trickle-down economics" has that effect. It is also true, however, that if you want economic growth and greater affluence for all, there is simply no alternative to "trickle-down economics," which is just another name for growth economics.

The world has yet to see a successful version of "trickle-up economics," an egalitarian society in which the state ensures that the fruits of economic growth are universally and equally shared. The trouble with this idea—it is, of course, the socialist ideal—is that it does not produce those fruits in the first place. Economic growth is promoted by entrepreneurs and innovators, whose ambitions, when realized, create inequality. No one with any knowledge of human nature can expect such people not to want to be relatively rich, and if they are too long frustrated they will cease to be productive. Nor can the state substitute for them, because the state simply cannot engage in the "creative destruction" that is an essential aspect of innovation. The state cannot and should not be a risk-taking institution, since it is politically impossible for any state to cope with the inevitable bankruptcies associated with economic risk taking."


We are heading in the wrong direction!

H/T: WSJ of September 19, 2009