Category Archives: Political Economy

Updated: The Oink Sector Is Always Seen (‘A Decrease In the Spending Increase’)

Barack Obama, Debt, Economy, Government, libertarianism, Paleolibertarianism, Political Economy, The State, War, Welfare

“The art of economics,” wrote Henry Hazlitt, “consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Hazlitt was encapsulating Bastiat’s What-Is-Seen-and-What-Is-Not-Seen principle.

“Flanked by emergency medical personnel,” write the editors at the WSJ, “Mr. Obama made his usual threat of Armageddon if automatic spending cuts go forward on March 1. Americans can expect more such melodrama in the coming days, so as a public service we thought we’d break down the President’s three biggest political tricks.”

Members of the “oink sector” were front and center in Obama’s show. What you didn’t see were the many private-sector suckers who work to fund the wealth consuming sponger sector, members of which were on show. What you didn’t see were the unemployed in the private sector, who are displaced because of the growth of government.

Think zero-sum, or parasite vs. host. The first (the parasite) is sucking the lifeblood of the second (the host). The larger the parasite gets, the weaker the host will grow.

UPDATED (2/22): “What a bunch of Keynesians,” writes the Fox News column “Power Play” about … the Republicans. Now that’s progress. (Fox News is usually a megaphone for the GOP.)

So here sit Republicans, teeth clenched, gripping their desks, waiting for the “devastating” cuts to explode the economy and just hoping that Obama will get some of the blame for having invented the thing. They are assuming that $85 billion less spent by the government will cause devastation in an economy of some $16 trillion.

The sequester, as everyone knows, “was …the brainchild of Team Obama.” It is nothing more than a “decrease in the increase in spending,” another good way to describe the “crippling reductions [Obama] says will result from the government spending only $15 billion more this year than last year.”

Rand Paul’s Rebuttal

Conservatism, Debt, Economy, Education, libertarianism, Political Economy, Republicans, Ron Paul

Rand Paul’s Tea party State of the Union 2013 rebuttal was the only speech worth listening to on that day. Even so, I found myself bristling at Rand’s philosophical compromises, as I went down the page and distilled the facts for you.

Rand Paul’s rose-tinted unemployment number: The junior United States Senator for Kentucky cited “official” unemployment figures, rather than real joblessness, which not even the U6 statistic covers.

Another bum note Rand sounded was on the “Balanced Budget Amendment”:

To begin with, we absolutely must pass a Balanced Budget Amendment to the Constitution!

It’s the sort of philosophical compromise his father would not have made. As this column observed in “Dead-End Debt Debate,” “what a balanced-budget requirement implies is that the government has the right to spend as much as it can take in; that it should be permitted to squander however much revenue—now there’s a nice word for taxes—it can extract from its enslaved wealth producers.”

Ron Paul would have demanded that entire departments be shuttered, not that the bums merely bring into balance what was stolen (taxes) and what is squandered (spending).

Another misstep saw Paul call for “ending all foreign aid to countries that are burning our flag and chanting death to America.”

No. End foreign aid, period.

As for “another downgrade of America’s credit rating”: It is not a bad thing because it is well-deserved. A downgrade is a must, as no serious spending cuts have been forthcoming.

Oy! And Rand Paul supports charter schools. Educational vouchers and charter schools are a species of the publicly funded system.

In any case, certain facts presented in Rand’s rebuttal should be pretty humdrum by now:

• “The US government is borrowing $50,000 per second.”

• “Over the past four years [BHO] has added over $6 trillion in new debt.”

• “Every debate in Washington is about how much to increase spending – a little or a lot.”

• “T]he $1.2 trillion sequester that [BHO] endorsed and signed into law … “doesn’t even cut any spending. It just slows the rate of growth.”

• “Even with the sequester, government will grow over $7 trillion over the next decade.”

• In essence, and “increase of $7 trillion in spending over a decade” is being “called a cut.”

• “[B]ig government and debt are not a friend to the poor and the elderly. Big-government debt keeps the poor poor and saps the savings of the elderly. This massive expansion of the debt destroys savings and steals the value of your wages. Big government makes it more expensive to put food on the table. Big government is not your friend. The President offers you free stuff but his policies keep you poor.”

• “Under President Obama, the ranks of America’s poor swelled to almost 1 in 6 people last year.”

• “Only through lower taxes, less regulation and more freedom will the economy begin to grow again.”

MORE.

UPDATED: Fix The Shoreline, Roll Back the Sea, Uncle Sam (Cap-In-Hand Chris Christie Agrees)

Government, Political Economy, Private Property, The State, Welfare

A Staten Island resident who lost it all in Hurricane Sandy could be heard demanding, on Huckabee’s Fox News show, that the government fix the shoreline. If it does that small thing, she and her plucky neighbors would gladly rebuild.

Yes, Uncle Sam, roll back the sea for the good lady, will you?

Another Huckbee guest complained that FEMA aid and private home insurance did not cover the cost of a new home. Kick in the difference, will you, Unckie Sam?

“Where I am going to spend Christmas?! Where do I put decorations up? Where do I put a Christmas tree up?”, demanded a gentleman who attended a FEMA town-hall meeting in New York, earlier this week. A neighbors chimed in, complaining that the lion’s share of the help she has received—and the only assistance matching her needs—came from her neighbors.

This you bemoan? Is it not a lesson for you?

Pundits soon turned to the question of suing the Federal Emergency Management Agency. And most agreed about the “wisdom” of “governmental immunity,” intended to “stop people from suing the government and government employees and officials in many cases.“

Indeed, legislators have used their position to pass laws exempting themselves and many others from liability. (In the event that you sue the state, guess who pays? We The People.) And the people want more of this corruption? (They will soon get doctors who can’t be sued.)

Let’s see: The victims described are surprised to have received close to no assistance from an entity whose employees are impervious to litigation, and immune from public shaming or loss of employment.

FEMA “victims” are surprised to have received the finger from an entity which is fortified by failure. The more a government agency fails, the more likely it is to receive more taxpayer funds.

In the bureaucracy, incentives are always inverted. Failure results in success: in more funds, more training, more time off. Failure will never see the closing of a government agency, or the firing of nasty, inefficient, over-paid, affirmatively appointed official.

These victims (and all those who demand from government what it cannot and will never give) refuse to comprehend that because of its very nature—a system without the imperatives of private property—government will never allocate or conserve resources efficiently.

Why on earth would anyone seek to interact with such an entity? (I have a good ideas why.)

UPDATE (Dec. 5): Predictably, Gov. cozy-up to Obama, cap-in-hand Chris Christie is on board with the mindset described. Two days ago he “announced that he has formally requested federal approval of 100% reimbursement for state and local government costs associated with debris removal and emergency protective measures that continue in the aftermath of Hurricane Sandy.”

Who said local was best? Not this big, fat ponce, to whom re-election is everything.

Death-Spiral States

Debt, Economy, Government, Political Economy, Private Property, Socialism, Taxation, The State

A death spiral state is one in which the parasites outnumber the hosts. In these states, the taker-(public sector workers)-to-maker (private sector workers) ratio is unsustainable.

William Baldwin of Forbes magazine defines a death-spiral state as one that has “more takers than makers,” where “a taker is someone who draws money from the government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.”

Charitably, Forbes counts only “11 death spiral states, rang[ing] from New Mexico, with 1.53 takers for every maker, down to Ohio, with a 1-to-1 ratio.”

Consider (or don’t):

Let’s say you are a software entrepreneur with 100 on your payroll. If you stay in San Francisco, your crew will support 139 takers. In Texas, they would support only 82. Austin looks very attractive.