Category Archives: Business

UPDATED: ‘How Do You Create A Job?’ (Hint: Food Stamps)

Business, Democrats, Economy, Free Markets, Socialism

In the Connecticut Senate debate, Republican Linda McMahon floored Democrat Richard Blumenthal with this simple question: “How Do You Create A Job?” Via the Free Republic: “Blumenthal stammers like an idiot. When he gets done, Linda McMahon schools him on the correct answer.” Writes David Freddoso of the Washington Examiner: “If you’re willing to suffer through Blumenthal’s answer, the response is pretty good”:

McMahon touches on the most important part of the production process: profits.
“Profits are the street signs of the free market—without profits there’d be no products.” [That’s Mercer, not McMahon.]

McMahon ought not to have used the active form of the verb, “create,” as it suggests that a central planner is involved in the creation of jobs. Her response, however, was instructive and refreshing. She might have also taken the opportunity to point out that production and jobs begin with savings and capital accumulation; not spending, as the DC establishment will have you believe.

But for an impromptu turning of the tables on a vile opponent (which is what McMahon’s performance was); she did a good job.

UPDATE (Oct. 7): Want to boost the employment prospects? “Do food stamps and unemployment insurance,” says Nancy Pelosi: “It is the biggest bang for the buck when you do food stamps and unemployment insurance — the biggest bang for the buck.”

Repeating the line twice was a form of self-persuasion.

Hot Air explains the liberal calculus whereby you forcibly take money from producers and hand it over to consumers and it magically multiplies:

“Pelosi, for her part, continues to insist that food stamps and unemployment stimulate the economy, and claims that every dollar spent in food stamps returns $1.79 to the economy. She floated this notion earlier this summer while trying to defend more borrowing to pay for yet another extension on jobless benefits rather than funding it through monies already authorized in Porkulus. That argument assumes that the $1 food stamp in question got plucked off the food-stamp tree at no cost to the government, rather than costing the full dollar plus the administrative costs of distribution and accountability. Even then, that dollar won’t generate a 79% ROI as it travels through the retail sector; if that were true, investors would put their money into nothing else.”

UPDATED: Big , Bad Business Generates The Jobs

Business, Economy, Labor

The Economist: “It is true that small companies create jobs, especially when they are first born. And small companies destroy millions of jobs when they die—which is often. In fact, only a small fraction of smaller enterprises are capable of generating sustained growth of very many jobs. Yet lawmakers of both parties fall over themselves as the protectors of small business, creating programmes that often help big corporations (and wealthy hedge-fund managers) as much or more than favoured smaller enterprises.”

The Economist’s statement, being the Economist, is somewhat incoherent, at least in its tenor. The writer editorializing, being of the Left, wants the politicians to help small business, even though his facts tell him the returns on such assistance are minimal and that small business is not necessarily the engine of economic growth.

Of course, contra the SE Cupp cool model of “capitalism,” helping big business is as capitalistically crony as helping the smaller concerns.

UPDATE: To Robert G.: Yes, indeed, and WHAT IS AN OPEN ECONOMY?

“The voluntary free market is a sacred extension of life itself. The free market—it has not been unfettered for a very long time—is really a spontaneously synchronized order comprising trillions upon trillions of voluntary acts that individuals perform in order to make a living. Introduce government force and coercion into this rhythm and you get life-threatening arrhythmia. Under increasing state control, this marketplace – this magic, organic agora – starts to splutter, and people suffer.”—ILANA (April 23, 2010)

True too is that Big Biz was once small biz.

UPDATED: Production Depends On Pressing Flesh In Washington (Big Biz Was Once Small, Dah!)

Business, Democracy, Economy, Healthcare, Political Economy, Regulation, Science, Technology

As discussed over these pixelated pages, the effects of the Obama healthscare are percolating down. Now the EETimes reports that, “As many as three-quarters of venture capitalists are exiting the health care field as the total pool of venture capital decreases and regulatory hurdles increase.”

Medical electronics companies face increasing hurdles getting funding and regulatory approval to bring new technologies to market, according to executives at a medical device event here.

“We’re in a bit of a perfect storm right now with some of the worst things I’ve seen in 30 years,” said Eamonn Hobbs, chief executive of DelCath Systems and chairman of the Medical Device Manufacturers Association (MDMA), host of the event.

As many as three-quarters of venture capitalists are exiting the health care field as the total pool of venture capital decreases and regulatory hurdles increase, said Kevin Wasserstein, managing director of Versant Ventures (Menlo Park, Calif.) which focuses on health care.

“Even entrepreneurs have started to retreat from pursing big ideas [in health care], and we risk as an industry evolving to incrementalism and safer projects,” said Wasserstein.

Some of the about 100 medical devices executives gathered here complained about what they said was an increasingly conservative and slow-moving U.S. Food and Drug Administration. The chief executive of one medical device company said his product is approved for sale in Europe, but is still waiting on an FDA OK to begin clinical trials.

UPDATED: (Sept. 21): Big Biz Was Once Small, Dah! What do you know, Bernie Marcus, Home Depot co-founder, was once the owner of a small business. How can that be? (Yeah, Obama … and the Republicans are idiots).

Yes, big business was once small. Through the democratic vote of the consumer, a small concern grows and grows to become a big, invariably, bad business. (Irony alert.)

Democracy practiced in the free market is the only democracy worth a dime. Let’s destroy the only honest democracy we have: the free market.

Paying Freddie & Fannie To Hoard Homes

Business, Debt, Government, Political Economy, Socialism

If there’s one thing you need to know about President Barack Obama so-called financial-regulatory overhaul it is that, predictably, it didn’t touch the Freddie Mac and Fannie Mae money pits. Freddie, a government owned mortgage-finance company, has cost taxpayers (or China) $63.1 billion, and it has “asked the U.S. Treasury to provide [it with an additional] $1.8 billion infusion.” “Fannie last week asked the government for $1.5 billion, bringing the total tab for the companies’ rescue to $148 billion.”

You will recalled that in May of this year, the thieves in charge of the Treasury handed over another $8.4 billion to “Fannie Mae and sister company Freddie Mac.” And that “The Obama administration had pledged to cover unlimited losses through 2012 for Freddie and Fannie, lifting an earlier cap of $400 billion.”

WSJ:

The U.S. took over Freddie and Fannie two years ago through a legal process known as conservatorship and has pledged to inject unlimited sums of aid over the next three years to keep the companies afloat.

Freddie is being propped up by taxpayers (read China) until eternity or until the US collapses, whichever comes first. This, despite the fact that these mortgage sinkholes should have long since been liquidated.

As a bankrupt and bankrupting state-run entity, Freddie and Fannie are responsive to political masters, not to markets. This would explain why these entities are hoarding houses when they should be getting rid of them at fire-sale prices.

As political players, they are expected to avoid “putting further pressure on home values.” “The inventory of homes owned by the companies has doubled over the past year, to a combined 191,000, up from 97,000 a year ago.”

Freddie and Fannie forever.