Category Archives: Economy

UPDATED: Big , Bad Business Generates The Jobs

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.

Global Ghouls Rising

Debt, Economy, EU, Europe, Political Economy, Regulation, Taxation

Since the onset of the economic crisis, the din has grown louder from assorted international institutions. It goes without saying that the demands are never for a dispersion of power. There have been various lunges for EU types of controls over financial institutions. Most of the resistance to the pull has come not from the US.

For example, and as I documented over this space, the Canadian government, not the American one, resisted a bank tax suggested by the the global regulatory regime.

Ministers fanned out across the world to raise opposition to the proposal for avoiding another financial crisis. ‘Canada is, and will remain, opposed to a tax that would penalize financial institutions that remained strong and prosperous while many of the world’s banks failed,’ Clement told a press conference with Foreign Minister Lawrence Cannon.”

“In an apparent attempt to reignite damped discussions on a key regulatory issue,” reports the Wall Street Journal, “the IMF proposed that a half-dozen or so of the countries with the biggest financial centers—such as the U.S., U.K., and Japan—voluntarily agree to a set of guidelines to resolve failed systemically important international financial firms.”

Not-so curiously, in opposition are the European countries: “it is uncertain whether [they] want to cede sovereignty on the issue.” Some of these countries have also implemented austerity measures, which have angered hedonistic B. Hussein. Remember when our president instructed German Chancellor Angela Merkel to “print more money, not make it”?

If the IMF is looking for the political will to galvanize the globe, they will surely find it in the US.

UPDATED: Tea Party Must Go To War With The War Party (Abu Ghraib à la Afghanistan)

Debt, Economy, Foreign Policy, Neoconservatism, Propaganda, War

Ending the warfare state is the only ray of hope for down-and-out, indebted America. With laser-like precision, Pat Buchanan zeroes in on the tack the tea party must take if it is to tackle the federal-induced “deficit-debt crisis, a national debt nearing 100 percent of gross domestic product and a deficit of 10 percent of GDP.” There is only “one place where a bipartisan majority may be found for major spending cuts: defense and the empire, the warfare state.”

“After Iraq and Afghanistan,” writes Buchanan, in “Tea Party vs. War Party?”, “the American people are not going to give the establishment and War Party a free hand in foreign policy. Every patriot will do what is necessary and pay what is needed to defend his country. But national security is one thing, empire security another.”

There is another matter I have raised in “Statism Starts With You!” and other recent columns, and it is “America’s fondness for Social Security, Medicare and Medicaid — which combined, account for close to half of the federal government’s budget.” “Only 7 percent of the country will consider slashing the first two welfare programs. And a mere eleven percent of those living in the ‘Land of the Free’ are prepared to pare down Medicaid. Keep the government out of my Medicare!”

For a lack of any other viable option for stalling State spending, the Tea Party must position itself in opposition to Obama’s volitional and inherited wars; ignore Mr. Hannity’s nagging about “Empire security,” and preach and proselytize about the end of Empire.

If ever there was a religious cause, ending America’s military forays abroad is it.

UPDATE: Abu Ghraib à la Afghanistan. You remember the pornographic pictorials from Abu Ghraib prison, starring some sadistic and slutty servicemen and women? Well, GI JOE and GI HO have relocated. And they will continue to do their thing until the US government stops unleashing them in other countries. (Place them on the US-Mexico border where they can scare some gangsters their own size—drug cartel members—if that’s not posse comitatus.)

HERE goes:

Those who have seen the photos say they are grisly: soldiers beside newly killed bodies, decaying corpses and severed fingers.
The dozens of photos, described in interviews and in e-mails and military documents obtained by The Associated Press, were seized by Army investigators and are a crucial part of the case against five soldiers accused of killing three Afghan civilians earlier this year.

UPDATED: They Call It “Quantitative Easing”

Debt, Economy, Federal Reserve Bank, Inflation, The West

“Quantitative Easing” is state-speak for the government monkeying with the money supply. “Fed head Ben Bernanke,” who tinkers all the time, has announced that inflation is too low, no less. “The solution?” writes Larry Kudlow, is to “punch up the money supply and punch down the dollar.” By another $1 trillion, I believe.

The increase in the money supply is in fact inflation. This legalized counterfeiting raises prices; the new money generates price hikes throughout the economy. However, it reaches the politically connected first. They get fat checks well before the general price increases caused by all the new money affect their purchasing power. Depreciation of the dollar spells higher prices and hardship for those of us who are removed from power and from the new money.

Then there’s hyperinflation.

“In a system with fractional reserve requirements, an increase in bank reserves can support a multiple expansion of deposits,” explains economist Anna J. Schwartz. “An increase in the supply of money works both through lowering interest rates, which spurs investment, and through putting more money in the hands of consumers, making them feel wealthier, and thus stimulating spending.”

They feel wealthier, but they are not, Schwartz ought to have added. Yes, and the outcome of “easing” is “malinvestment,” never sustainable investment. Any “recovery” invariably reported by the polls is a result of this “easing,” which further serves to mask economic reality.

UPDATE (Sept. 29): Such artificial expansions of the money supply cannot but result in a massive misallocation of scarce resources, enormous waste, and, eventually, a drastic lowering of the standards of living for all.

As is argued in the July 2010 issue of The Free Market, a publication of the Ludwig Von Mises Institute, the current, unprecedented expansion, will impact our very civilization, throwing us backwards to more atavistic times.