Category Archives: Economy

The Dynamics And Domino Effect Of The CBOaf

Debt, Economy, Healthcare, Welfare

OK. We don’t expect that parasitical hag Nancy Pelosi and the rest of the political retards in Washington to grasp Bastiat’s What-Is-Seen-and-What-Is-Not-Seen principle. But left off last night from Fox News’ corner of the idiot’s lantern, where looking for enlightenment is as hopeless, was the following pesky detail: Zero Care’s total of $1 trillion in tax increases and $2 trillion in subsidies for low-income individuals come from someone. Some workers are carrying this load. (Some of them live in China, where the money fairy resides.)

In fact, fewer and fewer of these workers are working harder and harder to support more and more.

The context? The latest immoral utterance to issue from the Obama White House, in the person of Press Secretary Jay Carney, and to be repeated across the liberal media: The “2.5 million Americans leaving the workforce was a good thing, because they would no longer be ‘trapped in a job.’”

Clarified by the WaPo’s occasionally factual Fact Checker, “the CBO said ACA, a.k.a Obamacare, would reduce the number of hours worked by the equivalent of 2.5 million full-time workers by 2025. That means that workers will decide to reduce their hours, not that employers are reducing the number of jobs.”

Writes ObamaHead Dana Milbank: “The CBO predicted the law would have a “substantially larger” impact on the labor market than it had previously expected: The law would reduce the workforce in 2021 by the equivalent of 2.3 million full-time workers, well more than the 800,000 originally anticipated. This will inevitably be a drag on economic growth, as more people decide government handouts are more attractive than working more and paying higher taxes.”

Incidentally, the mandate of the CBOafs (The Congressional Budget Oafs) is this: First they confirm government predictions of the great saving that are to be had from all government spending on welfare programs. Later, when it’s safer, they adjust their oafish and outlandish lies, so that the TV and radio mouths can continue muttering about their great authority, “Oh, the impartial CBO says this; oh, the independent CBO says that.”

* An example of a recent CBOaf nerd joke-cum-lie is this factoid: “The federal budget deficit will shrink to $514 billion in 2014, or 3 percent of GDP, CBO projects.”

Older ones include:

“CBO Confirms Families Will Save Money Under Health Reform.”

“CBO Update Shows Lower Costs for the New Health Care Law.”

“CBO Confirms: The Health Care Law Reduces the Deficit.”

That little derisive snicker made by the adorable Sheldon Cooper is in order on each account. (And this column snickers aplenty.)

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South Africa: The Story of Calamity

Africa, Economy, South-Africa

Writes a correspondent who is currently in South Africa:

“I am at the post office. Inefficiency here is nerve wracking: Taxis are on strike, the post office is on strike, the mines are on strike … The story of calamity.”

A story covered in the West only from a narrow, permissible, ahistoric, perspective.

The country has fallen “Into The Cannibal’s Post.”

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The Blind Spots Of Popular Economic Indices

Business, Economy, Private Property, Regulation

In their methodology, popular economic indices are woefully inadequate, as they take into consideration only a limited number of variables. So while you’ll be risking life, limb and property living in Rwanda, and will struggle with everything from poor infrastructure and limited human capital, to the paucity of potable water and Internet and electrical connectivity—as an entrepreneur, starting a new business there is much easier than in the U.S, in terms of “the number of procedures required, the time spent complying with them and the cost of doing so.”

Via Fox News:

A new study by the World Bank and the International Finance Corp. found that the U.S. ranks well behind countries like Rwanda, Belarus and Azerbaijan in terms of how easy it is for an entrepreneur to start a new business. The U.S. did narrowly beat Uzbekistan, though.
The rankings were included in the organizations’ joint study “Doing Business 2014: Understanding Regulations for Small- and Medium-Sized Businesses.” The annual report, released in October, ranks the relative ease of creating a new business in 189 countries, looking at such measures as the number of procedures required, the time spent complying with them and the cost of doing so, among other factors.
The report found that New Zealand is the easiest place in the world to create a new business. Starting one there requires “one procedure, half a day, (and) less than 1 percent of income per capita and no paid-in minimum capital,” the study noted. New Zealand was followed by Canada, Singapore, Australia and Hong Kong in the top five.
By contrast, the U.S. requires, on average, six procedures, takes five days and requires 1.5 percent of the company’s income per capita.

Still, that it is easier for a start-up to open the business doors in Rwanda, Belarus and Azerbaijan than it is in the U.S. is still a grave indictment of America.

Moreover, and as a friend, the Canadian economist Pierre Lemieux, once pointed out perspicaciously, economic indices ignore a “Century of the State.” “If ‘economic freedom’ is inseparable from the rest of human liberty in a social context (using one’s property to express dissenting opinions, travel, have sex, grow marijuana, store one’s firearms, raise funds from “public” investors, etc.), the freedom indexes are off the mark”:

This explains why some countries ruled by hard tyrannies (as opposed to the soft, Tocquevillian brand we know in the West), where nobody in his right mind would want live except to make a buck as a privileged foreigner or a member the local nomenklatura, make it to the top of the list. Who would want to live in Hong Kong (ranked 1st of 151 countries in the HF/WSJ index), that is, under one of the worst tyrannies on earth, and so much so for its very efficiency? Who would want to be a peasant under other Asian tyrannies like Singapore (ranked 2nd)?

The selective definition of economic freedom also explains why the indexes show growing economic freedom while everybody who lives in the real world must know that the 20th century, rightly described by Mussolini as ‘the century of the state,’ is continuing in the 21st with a vengeance. During the 12 years of the HF/WSJ index, economic freedom is supposed to have increased. For example, over that period, both the U.S. (now ranked 9th) and Canada (ranked 12th) have improved their scores by 11%, while in both countries (and others) the Surveillance State was growing uncontrollably, including on financial markets. In the U.S., so many business executives are going to jail that perhaps repression will have to be outsourced to China.

Thus, the ‘economic freedom’ that is being measured is a rather special animal: it is the freedom to do what is narrowly defined as freedom in the statistics underlying the index. In practice, the freedom indexes encompass some general conditions for economic freedom (like a stable currency, or narrowly defined ‘property rights’), specific government restrictions or controls (on foreign investment, for example), and consequences of state intervention (the informal economy or corruption). And, of course, the weights assigned to the components of the indexes are arbitrary.

I am not saying that such indexes are totally useless. They do regroup variables that are correlated with GDP per capita and its growth, but keep in mind that GDP is a very unreliable construct that reveals basically nothing about the general welfare, and is based on arbitrary value judgments (this is pretty standard welfare economics: see my upcoming article in The Independent Review). The indexes may correlate with the difficulties the businessman will have with local bureaucracies. They may even indicate opportunities for investors to make money in limited contexts, assuming the information has not already been incorporated in prices. The HF/WSJ publication even contains some useful country summaries and international statistics.”
But the freedom indexes have little to do with ‘economic freedom’ as we use the term in politics, economics and philosophy.

Via BAB.

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UPDATED: Liars at Labor (40,000 New Reasons For More Joblessness)

Economy, Labor, Law, Regulation

As a more realistic index of unemployment, we’ve always reported the U-6 unemployment index, which includes the unemployed and people who would like to work but who have not looked for a job recently, as well as those involuntarily working part-time. But at 13.1 percent, the U-6 is overly optimistic. The “actual unemployment rate is 37.2 percent.”

Via Washington Examiner:

David John Marotta calculates the actual unemployment rate of those not working at a sky-high 37.2 percent, not the 6.7 percent advertised by the Fed, and the Misery Index at over 14, not the 8 claimed by the government.

Marotta, who recently advised those worried about an imploding economy to get a gun, said that the government isn’t being honest in how it calculates those out of the workforce or inflation, the two numbers used to get the Misery Index figure.
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“The unemployment rate only describes people who are currently working or looking for work,” he said. That leaves out a ton more.

“Unemployment in its truest definition, meaning the portion of people who do not have any job, is 37.2 percent. This number obviously includes some people who are not or never plan to seek employment. But it does describe how many people are not able to, do not want to or cannot find a way to work. Policies that remove the barriers to employment, thus decreasing this number, are obviously beneficial,” he and colleague Megan Russell in their new investors note from their offices in Charlottesville, Va.


UPDATE: Here are 40,000 new reasons for more unemployment. These lousy laws will also make you an outlaw, if violated.

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Conservatives Adopting Lefty Language About ‘Income Inequality’

Business, Capitalism, Conservatism, Economy, Federal Reserve Bank, Individualism Vs. Collectivism, Private Property, The State

A more meaningful index than “income inequality”—it implies that income equality is the thing to strive for, heaven help us!—would be the correlation between the increasing balance sheets of the central banks of the world and so-called increasing wealth discrepancies.

Conservatives rarely argue the morality of capitalism and individual liberty. If they do debate, it is about the utility of freedom to the common good. The entire impetus of Republican-Party operatives is to keep up with the issues the Democrats introduce to distract from the destructive effects of galloping statism. So if the latter decry “income inequality,” the former affirm that they too worry themselves sick over whatever it is the Democrats are droning on about.

Today, Fox News reported gravely that the “World’s richest 85 people have as much as bottom half the population.” Similarly, this writer assures his readers that “Inequality is a Conservative Issue.”

“The Capitalist Professor” George Reisman is having none of it. He writes “In Defense of Business Fortunes and the Destructive Effects of Imposing Economic Equality,” at, @GGReisman:

1. A fortune is accumulated by means of earning a high rate of profit on capital and heavily saving and reinvesting it year after year.

2. The high rate of profit is achieved by introducing newer, better products or producing existing products at a lower cost.

3. Sooner or later, competition brings down a high rate of profit to the general level. To go on earning it, further innovation is necessary.

4. For example, to maintain its high rate of profit, Apple has had to repeatedly improve its products and introduce several major new ones.

5. Had Apple stood still, its initially very profitable products, made obsolete by competition, would now be selling at huge losses.

6. The high profits are generally invested in the means of producing the very kind of products in which the innovations take place.

7. For example, Apple’s profits are invested in the expanded and improved production of Apple’s products.

8. Thus, business fortunes under capitalism represent ever better, less expensive products produced with capital constituted by those fortunes.

9. The fortunes originate in profits and are used as capital. Both ways they serve the general buying public. They also pay wages and salaries.

10. The existence of fortunes under capitalism benefits everyone in his capacity both as a buyer of products and seller of labor.

11. Imposing economic equality requires the confiscation of high profits. It would abort the earning of fortunes and stifle economic progress.

12. Advocates of economic equality know nothing about profits, innovation, or capital. They believe that wealth is a pile of consumers’ goods.

13. The capitalists, whom they depict as fat men, allegedly have too much of this pile. Some of it must be given to the starving masses.

14. Thus, imposing economic equality is also a policy of seizing capital in order to consume it—eating the seed corn and being impoverished.

15. Advocates of economic equality are wilfully ignorant of economics. They are fueled by envy and resentment, biting the hands that feed them.

16. Socialism/Communism is their philosophy. Stalin and Mao are their heroes. Famine, slave labor camps, and mass death are their legacy.

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On Health Care & ‘Homo Economicus,’ And The Spoils Of Entrapment & Political Predation

Economy, Healthcare, Media, Politics, Propaganda, Regulation, Terrorism

Health Care & ‘Homo Economicus. Even the pro-Obama socialist youth of America act as “Homo Economicus”: they know they are young and healthy and unlikely to fall ill. Why should they partake in a scheme that financially punishes them for this natural advantage? Millennials want us to pay for them, not the reverse.

“Federal Health Care Enrollees: Older Outnumber Younger”:

.. more than 2 million people who have signed up for private [it's not private: "A healthcare cauldron of Obama's creation, government-run exchanges constitute a planned economy, not a market economy"] health insurance through the exchanges set up by the federal government. … Of those who signed up in the first three months, 55 percent are age 45 to 64, officials said. Only 24 percent of those choosing a health insurance plan are 18 to 34, a group that is usually healthier and needs fewer costly medical services. People 55 to 64 – just below the age at which people qualify for Medicare — represented the largest group, at 33 percent.”

Speaking of the Dah Factor, or of the news newsmen were not anticipating (but you were):

“Review Of Terrorism Cases Finds NSA Spying Helped Very Little”:

Surveillance programs run by the National Security Agency helped very little when it came to cases brought against individuals the United States says were linked to al-Qaida. …

A great deal of efforts of our spymaster “protectors” go into entrapment; concocting elaborate traps to ensnare potential “evil doers”; “setting swarthy simpletons up and then nabbing them in a so-called terrorism sting.”

More non-news:

“Majority In Congress Are Millionaires”: Of course, the reporter doesn’t tell us how the predatory political class has acquired wealth, for he doesn’t think that it’s important, nevertheless:

For the first time in history, more than half the members of Congress are millionaires, according to a new analysis of financial disclosure reports conducted by the non-partisan .
Of the 534 current members of the House and Senate, 268 had an average net worth of $1 million or more in 2012 – up from 257 members in 2011. The median net worth for members of the House and Senate was $1,008,767.

Rep. Darrell Issa notwithstanding—he made his fortune, if I am not mistaken, in business, before joining the parasites in Congress—”The political class and its sycophants utilize the political means to earn their keep. As libertarian economist Murray Rothbard reminded, these ‘are two mutually exclusive ways of acquiring wealth”—the economic means is honest and productive, the political means is dishonest and predatory…but oh so very effective.’”

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