Category Archives: Political Economy

Aiming For … Argentina

Capitalism, Debt, Economy, Federal Reserve Bank, Free Markets, Political Economy, Regulation

“Argentina did not become relatively poor because of having been involved in destructive conflicts. It became poor because it has had a series of both democratically elected leaders and non-elected dictators who never missed an opportunity to make the wrong economic decisions,” writes Richard W. Rahn of the Cato Institute.

“A century ago, if you had told typical citizens of Argentina (which at that time was enjoying the fourth-highest per capita income in the world) that it would decline to become just the 76th richest nation on a per capita basis in 2010, they probably would not have found it believable. They might have responded, ‘This could not happen; we are a nation rich in natural resources, with a great climate for agriculture. Our people are well educated and largely descended from European stock. We have property rights, the rule of law and an open free-market economy.’

[Ilana Aside: You’re a naughty boy, Mr. Rahn. Do you mean to infer that the fact of European extraction is an argument for economic prosperity?! What a bad boy! ]

“But the fact is, Argentina has been going downhill for eight decades, and it has the second-worst credit ranking in the entire world… the Argentine government increased its interventions in the private economy. Juan Peron took over in 1946 and ended up nationalizing the railroads, the merchant marine, public utilities, public transport and other parts of the private economy. For much of the past half-century, Argentina has engaged in a series of erratic monetary policies, often resulting in periods of very high inflation and economic stagnation. Because of their political power, the unions have been coddled, resulting in unsustainable wage-and-benefit programs. Excessive government spending has caused recurrent fiscal meltdowns, where both foreign and domestic debt-holders have lost many of their investments.

According to the Economic Freedom of the World Annual Report (published by the Fraser Institute in cooperation with the Cato Institute and others), Argentina ranks 105 out of 141 countries surveyed. Similarly, the 2010 Index of Economic Freedom (published by the Heritage Foundation and the Wall Street Journal) ranks Argentina 135 out of the 179 countries surveyed. (The U.S. is No. 8 and falling.) ….”

Read the complete article at The Washington Times.

CBOafs Scores Always Way Off

Debt, Democrats, Economy, Government, Healthcare, Political Economy, Regulation

Has any bill passed by Washington ever come in on or under budget? Of course not, but faith runs eternal among the faithful. Cato Institute’s Michael Cannon has said what I did in my last column, “Heeere’s Health-Scare”: “Ultimately, the CBOafs’ forecast is only as good as their premise, which is faulty” (my version). “The Democrats have required the CBO to adopt some really unrealistic assumptions … even if those projections are accurate, politics gets hold of that program. And people start demanding more out of that program” (Cannon’s).

Here are some facts from a research paper authored by FreedomWorks Foundation:

* “The Medicare Program: When Medicare was instituted in 1965, there was no Congressional Budget Office. Instead, in 1967 House Ways and Means analysts estimated the cost of the program. Medicare, they predicted, would cost $12 billion in 1990. (1) They were wrong—by a staggering factor of 10. The actual spending in 1990 was $110 billion. (2) And Medicare costs continue to skyrocket. Through the first 9 months of 2009, Medicare has cost taxpayers $314 billion and that price tag continues to grow by 10%. (3)

In the case of the Medicare Program, the government estimate was off by over 816%. If the CBO estimate for the Senate health care bill is off by the same percentage, then the price of reform may be as high as $7.74 trillion.”

Republicans Just Jealous

Democrats, Elections, Healthcare, Political Economy, Regulation, Republicans

I’m always appalled by individuals, even on this site, who keep faith with the two-party system—and especially, the Republican Party—which, they insist, can be reformed. They’ve been watching the worms wriggle longer than I; but from where I’m perched, it is plain that had Republicans not made such a nuisance of themselves for so long, they’d be standing where BO is standing, heralding the near completion of the work of FDR.

That ObamaCare is awfully similar to (Mitt) RomneyCare is also plain to policy wonks who’re in the know. David Frum is an example. Admonishing the GOP for losing it by ostensibly tacking right—engaging in “overheated talk” and refusing “to deal”—David Frum points out that,

The Obama plan has a broad family resemblance to Mitt Romney’s Massachusetts plan. It builds on ideas developed at the Heritage Foundation in the early 1990s that formed the basis for Republican counter-proposals to Clintoncare in 1993-1994.

The FrumForum has more on the statist points of intersection between Romney- and ObamaCare:

Romneycare … did not create a federal bureaucracy; it created a state bureaucracy. It did not raise taxes; but instead was based on $300 million in free federal money. But in the main outlines, the two programs are identical.

My colleague Vox Day writes the following:

“…it is completely shameless for Republicans to complain that nationalizing health care is an unconstitutional expansion of federal power.”

“It wasn’t all that long ago that Republicans held the White House, the Senate and the House of Representatives. With the exception of an 18-month senatorial interregnum from May 2001 to November 2002, the Republican Party held unilateral control of all three branches of the federal government for six years. And what did it do with it?”

“Republicans wasted their electoral popularity on two unnecessary and unpopular military occupations. They foolishly transformed what had briefly been a bipartisan budget surplus into what were then thought to be nearly unprecedented deficits. They stupidly created a new federal entitlement program that has turned out to cost far more than was originally estimated. And, to top it all off, they arrogantly ignored the clearly expressed wishes of the American public and handed over $700 billion to a collection of corrupt and insolvent bankers.”

Updated: Toyoda Vs. Torquemada

Business, Fascism, Political Economy, Politics, Regulation, Republicans, Technology

The excerpt is from “Toyoda Vs. Torquemada,” my latest WND.COM column:

“Mr. Akio Toyoda, the president of Toyota, could have achieved the brevity much-admired in his culture (and mine) had he responded thus to the invitation to appear before the congressional committee investigating the recall of eight million of his vehicles:

House Committee on Oversight and Government Reform’s invitation to Mr. Toyoda: ‘Dear Mr. Toyoda, we will be sitting between 11:00 AM and 5:00PM on February the 24th.’

Toyoda’s putative Reply: ‘Akio Toyoda likewise.’

To complete the one-two punch, Mr. Toyoda’s second in command, Yoshimi Inaba, president of Toyota Motors North America, ought to have sent each of his would-be Democrat and Republican inquisitors a short note, in large typeface, preferably with pop-up pictures.

In it, he ought to have reminded them that his company employs over 170,000 of their countrymen; has invested billions in capitalizing its factories, and is philanthropic at a time when Americans are desperate for charity.

… Mention the unseemly specter of a government—the owner de jure of General Motors and Chrysler—strong-arming the competition, his own Free-Market Motors.

A well-worded barb about the embarrassing, timely FBI raid on a Toyota auto parts operation in Detroit would have been apropos as well. Tell them, Mr. Toyoda, that you are doing business in a country where the competition is backed by the power of the police.

In closing, Toyoda might have reminded the overweening House Committee on Oversight and Government Reform that his bosses are Toyota’s customers, and that it is to them alone that he’d be answering.

Back on terra firma, … ”

Read the complete column, “Toyoda Vs. Torquemada.”

And do read my libertarian manifesto, Broad Sides: One Woman’s Clash With A Corrupt Society.

The Second Edition features bonus material. Get your copy (or copies) now!

Update (Feb. 27): By the by, this household has never contemplated buying an American car. Gutless gas guzzlers, mostly. If the US made cars comparable in performance and economy to those of Toyota or VW—then sure. American cars are really ugly too, except for the Corvette and mustang. The first is a good car, except that it has some old-engine style oddity that requires yearly tweaking, or so I am told. The Mustang is completely gutless compared to this pocket rocket.