Category Archives: Economy

UPDATE II: Egypt In Economic Context (‘A Wave of Global Inflation’)

America, Economy, Foreign Aid, Foreign Policy, Inflation, Middle East, Neoconservatism, Republicans

Speaking of boobs (http://barelyablog.com/?p=33995), Dana Perino, the Heidi Klum of the commentariat, wishes Iraq on the Egyptians. Perino, who was once a spokesperson to Bush, a man who was barely able to speak, prattled to a reserved Megyn Kelly on Fox News about the upheaval in Egypt.

Mentioning her boss’ achievements in Iraq made Ms. Mindless glow with pride. She pointed out that the bliss in Baghdad was brought about in response to the democratic urges of the Iraqis—yes, this was murder with majority approval, an American majority (http://www.ilanamercer.com/phprunner/public_article_list_view.php?editid1=363.) Perino also implied that glorious Iraq is a product of a well-thought out philosophy.

Airheads aside, serious analysts—the kind who also live in the region or visit it on occasion—say Iraq “is looking a lot like Lebanon,” violent and balkanized beyond repair. Its few remaining Christians are being systematically exterminated.

Perino gave another shout-out of sorts to Iranian interests. Without being asked, she dredged up the Gaza-strip elections her boss had agitated for and got, back in the day. If you recall, those gave us Hamas.

Another day, another dullard.

Even John Bolton, who’ll take any position in opposition to Obama’s less bellicose foreign policy, seemed to agree with the restraint of the State Department’s response to the riots roiling Egypt.

Contrast Bolton’s unusual retrain with the American Enterprise Institute’s formulaic demand that “President Obama’s administration … assert the U.S. government’s role as the preeminent defender of freedom in the world. … Now is not the time for equivocation.”

Ditto the Weekly Standard. The folks there hanker after a time “when the Bush White House was feeling its oats with victories for the freedom agenda in Iraq and then Lebanon.”

That’s the neoconservative parallel universe for you.

In response to Bush pressure, “Mubarak pushed back with the 2005 parliamentary elections when he awarded the Muslim Brotherhood some 20 percent of the seats—if you want democracy, the Egyptian president seemed to be warning the White House, I’ll stick Osama bin Laden’s friends in parliament.”

Justin Raimondo, at Antiwar.com (for which I once wrote a bi-weekly column), puts “the revolutionary wave now sweeping the world” in the context of catastrophic economic policies and attendant realities. This wave will not spare the US, despite “the myth of ‘American exceptionalism,’ which supposedly anoints us with a special destiny and gives us the right to order the world according to our uniquely acquired position of preeminence.”

Coming to a neighborhood near you?

UPDATE I: You bet. In Egypt, “The government must approve the formation of political parties, effectively assuring its monopoly on political power.” (Via Infoplease.com ) More to the point: “the country’s inefficient state-run industries, its bloated public sector, and its large military investments resulted in inflation, unemployment, a severe trade deficit, and heavy public debt.”

State-caused poverty and the attendant lack of opportunities are likely the catalysts that have sent Egyptians into the streets.

The emphasis, in the US, exclusively on politics and on Egypt’s democracy deficit is myopic. Nevertheless, this focus allows DC’s chattering classes to forget that we too, albeit to a lesser extent, are over-leveraged. Our moocher and looter classes might also riot once they can no longer live out the life to which they are accustomed.

UPDATE II (Jan. 29): “A Wave of Global Inflation” is the tipping point for Egypt. Jerry Bowyer, author of “Free Market Capitalist’s Survival Guide,” agrees about the role of inflation and the attendant spike in the prices of basic necessities in the crisis in Egypt.

The CBOafs And Tax Cuts

Debt, Economy, Political Economy, Private Property, Reason, Taxation, The State

The prediction of the CBOafs (The Congressional Budget Oafs) with respect to the “cost” of tax cuts is only as good as their premise, which is faulty. That premise is that property stolen by the state from its rightful owners (taxpayers) will be used to pay down the debt and the deficit incurred by the same band of brigands.

And CBOafs will fly. (Apologies, by the way, to bandits for comparing them to government officials. As one libertarian wag once pointed out, highway robbers are fairer and more benevolent than government, because they rob you once, usually, and then leave you be.)

As the Congressional Budget Office warned today, “Last month’s bipartisan tax cut legislation will drive the government’s deficit to a record $1.5 trillion this year.” (http://www.foxnews.com/politics/2011/01/26/federal-deficit-hit-trillion-budget-office-projects/)

In logic, a conclusion can be correct and untrue at once. The debt will go up—not because of tax cuts, but despite of them.

No matter how much these highway robbers take from the creators of wealth, the debts they incur will only go up. The lesson? Money is always safest with those who make it.

UPDATED: An Ass With Ears

Barack Obama, China, Economy, Education, Energy, Politics

OBAMA IS. You can coast to the presidency absent any understanding of economics. The rise of China Obama put down, in his pep-talk to the nation, to the child-rearing methods of the Tiger moms (http://barelyablog.com/?p=33597). Sinophobia notwithstanding (http://www.ilanamercer.com/phprunner/public_article_list_view.php?editid1=584), as American society is increasingly silhouetted by the State, China is undergoning considerable economic restructuring and market reforms, the consequence of which is a 300 million strong Chinese middle class, and poverty levels that have receded from “53 percent in 1981 to 8 percent in 2001. Only about a third of the economy is now directly state-controlled. As of 2005, 70 percent of China’s GDP was in the private sector.” The Chinese financial system is duly being liberalized—banking is diversifying and stock markets are developing. Protections for private property rights are being strengthened as well.

Obama thinks that a nascent China owes its increasing economic strength not to this liberalization, but to the fact that they “started educating their children earlier and longer, with greater emphasis on math and science,” and that the government is “investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer,” he added.

The truth is that the US is in the red and getting redder, not China.

***

The central planner-in-chief also denounced his subsidies to the oil industry—he did a lot of denouncing of policies he had either put in place, or could have repealed—while, in the same breath, recommending that we “invest in tomorrow’s energy.”

In other words, state planning is a “subsidy” when it is applied to “bad” energy, but an “investment” when applied to the “good” energy source.

The Goods on Gas for Asses: The more efficient the source of energy, the less waste and pollution are involved in its conversion into energy. Think of the totality of the production process! The fewer resources expended in bringing a fuel to market, the cleaner and cheaper is the process.

Oil is the second most efficient, cheapest source of energy, Obama’s wish is our demise. For ordinary folks, the biomass-based economy means life without the basics.

UPDATE (Jan. 27): In reply to Bob’s comment: Neither do I hold China to be a capitalist society, if you read the article I cited. But neither do I think the US is capitalistic any longer; we just pretend we are. My comments spoke to a trend: China is growing because it is liberalizing its economy; we are shrinking because we are centralizing ours.

UPDATE II: House Republicans Talking Tactics & Tinkering Around the Edges

Debt, Economy, Elections, Politics, Republicans

No wonder neoconservative kingpin Bill Kristol (http://barelyablog.com/?p=33225) anointed House Budget Chairman Rep. Paul Ryan as heir apparent to the neoconservative project. Ryan is a strategist; he has more plans than principles. You and I do not want to see the debt ceiling raised. But for some reason, Ryan thinks that “tactic isn’t viable.”

Tactic? Come Again? Ryan believes that it has to be lifted (something to do with the neoconservative national-pride dybbuk).

He is, however, prepared to “tack on requirements for deep spending cuts as a condition of passage.” (http://firstread.msnbc.msn.com/_news/2011/01/06/5779097-ryan-hints-at-debt-ceiling-strategy) Why, thank you, Sir.

No sooner do our overlords arrive in DC, than their campaign promises evaporate. (http://www.ilanamercer.com/phprunner/public_article_list_view.php?editid1=579.)

(I’m placing hyperlinks in brackets, for now, because hyperlinks attached distort the blurb that propagates to my Facebook page. Any suggestions?)

UPDATE I (Jan. 14): When it comes to serious spending cuts, Republicans intend to tinker around the edges. John Stossel exposes just how little they will do to beat back the federal behemoth:

New Speaker John Boehner, leader of the Republicans who now control the House, says he wants to cut spending. When he was sworn in last week, he declared: “Our spending has caught up with us. … No longer can we kick the can down the road.”
But when NBC anchorman Brian Williams asked him to name a program “we could do without,” he said, “I don’t think I have one off the top of my head.”
Give me a break! You mean to tell me the Republican leader in the House doesn’t already know what he wants to cut? I don’t know which is worse — that he doesn’t have a list or that he won’t talk about it in public.
The Republicans say they’ll start by cutting $100 billion, but let’s put that in perspective. The budget is close to $4 trillion. So $100 billion is just 2.5 percent. That’s shooting too low. Firms in the private sector make cuts like that all the time. It’s considered good business — pruning away deadwood.
GOP leaders say the source of their short-run cuts will be discretionary non-security spending. They foolishly exclude entitlement spending, which Congress puts on autopilot, and all spending for national and homeland security (whether it’s necessary or not). That leaves only $520 billion.
So even if the Republicans managed to cut all discretionary non-security spending (which is not what they plan), the deficit would still be $747 billion. (The deficit is now projected to be $1.267 trillion.)
This is a revolution? Republicans will have to learn that there is no budget line labeled “waste, fraud, abuse.” If they are serious about cutting government, they will ax entire programs, departments and missions.

UPDATE II (Jan 16.): Rep. Eric Cantor of Virginia, the House Majority Leader, was out and about … lobbying for an increase in the debt ceiling. Why, of course. Give a little, get even less. “Live and let live,” said the one leech to the other.