Category Archives: Political Economy

Updated: The Dollar Dethroned

China, Debt, Economy, Federal Reserve Bank, Political Economy

As has been lamented on this space time and again, the trashing of the dollar by the Bush/Barack soul mates has resulted in the currency’s demise as “the bedrock of world trade.”

It’s a slow and sad demise: “The latest sign of the ground shifting beneath our feet is [the report by the Independent today] of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.”

“It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year’s meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.”

“It is also easy to see why China would like a world trading system that is underpinned by other currencies as well as the dollar. For the past decade Beijing has been recycling the proceeds of its giant national trade surplus into purchases of US government bonds and other dollar-denominated assets. China too stands to make a significant loss if the value of the dollar falls. For China, however, the timing is much more sensitive. Beijing needs to reduce its dollar holdings, but if it does so too quickly it will bring about the very devaluation it fears. This explains why Chinese officials appear to want this transition to take place gradually over the next decade.”

[SNIP]

The usual tele-Demopublicans will depict this economic impetus as an act of political treachery. But what else can these nations do? Fall on their proverbial swords for the US?

Update (Oct. 7): “Stop printing money,” “We don’t care what you think,” and “You’re a moron”: This is a sweet sample of the heckling that greeted Rep. Steve Israel (D-Huntington), during a healthscare townhall meeting. It’s always encouraging when protesters associate a massive new government program with the debt (dah!), the demise of the dollar, and ultimate economic ruin. I know; this seems obvious to readers on this space, but signs that such basic comprehension is spreading are to be celebrated.

Updated: Life In The Oink Sector

Barack Obama, Bush, Debt, Economy, Government, Political Economy, The State

The excerpt is from my new WND.COM column, “Life In The Oink Sector”:

“Government workers may not always be genial to the public that pays them, but they are generous to a fault with their own. In the course of providing the stellar service for which the United States Postal Service has become famous, they pay themselves sizable salaries and bountiful benefits, and retire years before the stiffs who support them can afford to.”…

A sample of life in the Oink Sector (I offer many more):

“When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the average compensation of $59,909 for private sector workers. This places the value of benefits for federal civilian workers at an average of $40,000 a year, four times the value of benefits that the average private sector employee receives.”…

“The average worker in the US pays $10,000 in income taxes; enough to keep one federal worker in style for one month! There are upward of 20 million of these pampered pigs, hogging 87,000 different institutions in government and public education, where the payrolls are always lard-laden in comparison to private-economy paysheets.”

“The number of government workers is increasing and is projected to continue on this trajectory.”…

“Over and above these mind-numbing numbers, it’s crucial to comprehend the underlying principles that permit in one sphere (the public sector) what they prohibit in the other (the private sector).”…

Read the complete column, “Life In The Oink Sector.” You can catch it too on Taki’s Magazine every week-end.

Update (Sept. 25): To clarify: there are very many good people who work for the state. In many cases this is becasue the government has expanded into so many sectors and industries that these professionals have few other options. Moreover, there are dedicated civil servants who take their jobs very seriously. Granted, due to rampant affirmative action and becasue of the fact that rigorous tests for civil servants are no longer administered (as these are said to disadvantage minorities), quality is increasingly rare. Put it this way: It’s been a long times since I’ve encountered a government worker who helped, rather than hindered, me. Or even did his job well. Are there some gifted teachers in the public school system? Yes, but it is well known that anyone dedicated to a core curriculum and proficiency over and above self-esteem will not survive. It is also well-known that teachers are some of the least intelligent college graduates.

Back to the point. Good people who work for the government for lack of viable options are victims, not perps.

Updated: No Experience In Ruining The Country

Capitalism, Debt, Economy, Federal Reserve Bank, Foreign Policy, Political Economy, Politics

“My lack of experience is my greatest attribute. I have no experience in ruining the country,” said a witty Peter Schiff, who announced (on MSNBC’s “Morning Joe”) a run for the US Senate in his home state of Connecticut. After whipping the Republicans, we hope, Schiff will challenge Democrat Chris Dodd, the poster boy for the “experience” that has ruined this country.

Update (Sept. 19): Van Wijk is correct: As a financial analyst with a considerable clientele, Schiff has wisely steered clear from being excessively political. To me, this means that he is a careful man, who thinks hard before mouthing off. The more issues one expatiates upon as a commentator, the more people one risks angering and alienating. I should know. Why do you think that so-called “courageous” columnists such as Ann Coulter stick to a limited range of issues—“liberal this; liberal that, the wonders of war, and the horrors of abortion, etc.”—while avoiding the hard ones (immigration, the “national question,” the economy)? Because by being completely uncontroversial she never risks alienating the base.

I always come back to Kevin Michael Grace’s aphorism: “The secret to becoming a successful right-wing columnist,” quipped the Canadian conservative, “is to echo the mob while complimenting yourself on your daring.”

Schiff has been fearless on matters economical—fearless and correct. He is also a libertarian and a former adviser to Ron Paul. His positions—and he’ll come out with them in the fullness of time—would correspond with Paul’s.

Another thing: everything does boil down to an understanding that one cannot spend funds one doesn’t have. Think about the Republicans who ran in the primaries. Did you ever hear any of them say, “folks, I’d love to indulge your phony rah-rah-for-the-troops patriotism and keep the army in Iraq, but we’re out of money”?

Preparing For Unhealthy Propaganda

BAB's A List, Communism, Economy, Healthcare, Individual Rights, Objectivism, Political Economy, Propaganda, Socialism

As valid today as it was when it was first written for the occasion of Hillary Healthcare, Dr. George Reisman’s 1994 essay, “THE REAL RIGHT TO MEDICAL CARE VERSUS SOCIALIZED MEDICINE, is a must read in anticipation of Obama’s obfuscating oratory tonight. As Dr. Reisman puts it, “It’s a demonstration that government intervention inspired by the philosophy of collectivism is the cause of America’s medical crisis and that a free market in medical care is the solution for the crisis.”

Begin with the premise undergirding the Obama argument:

“For over a century, virtually all proposals for economic or social reform have been based on the thoroughly mistaken philosophical and theoretical foundations of Marxism, and have aimed at the ultimate achievement of a socialist society, in the belief that socialism represented the most rational and moral system of mankind’s social organization. On the basis of this conviction, individual freedom was progressively restricted and the power of the state progressively enlarged. Individual freedom—laissez faire capitalism—was assumed to be a system of chaos and of the exploitation of the masses by the capitalists. The onslaught of the socialists (who in this country call themselves “liberals”)—the step-by-step achievement of their political agenda—encountered virtually no philosophical resistance. Not surprisingly, again and again, the “liberals” defeated their ill-equipped conservative adversaries, who at most could only delay their advance. The victories of the “liberals” were inevitable because it was a battle of men with the seeming vision of a better world that could be achieved by means of intelligent human effort based on a body of ideas (however mistaken those ideas were), against men who, while they valued the relatively free world they saw around them, had no significant philosophical or theoretical knowledge of how to defend it.”

Move on to an understanding of your rights. Who exactly is violating these immutable rights?

“… the right to medical care does not mean a right to medical care as such, but to the medical care one can buy from willing providers. One’s right to medical care is violated not when there is medical care that one cannot afford to buy, but when there is medical care that one could afford to buy if one were not prevented from doing so by the initiation of physical force. It is violated by medical licensing legislation and by every other form of legislation and regulation that artificially raises the cost of medical care and thereby prevents people from obtaining the medical care they otherwise could have obtained from willing providers. The precise nature of such legislation and regulation we shall see in detail, in due course.”

“This then is the concept of rights, and specifically of rights to things, that I uphold. One’s rights to things are rights only to things one can obtain in free trade, with the voluntary consent of those who are to provide them. All such rights are predicated upon full respect for the persons and property of others.”

The solution? A Free Market in Medical Care:

“To be successful, such reform must approach the problem of bringing down medical costs from two sides: on the one side, the reduction and ultimate total elimination of the artificial increase in demand for medical care fostered by the alleged need-based right to medical care and the collectivization of costs to pay for it. On the other side, the reduction and ultimate total elimination of the artificial increase in medical costs caused both by the alleged need-based right to medical care and by medical licensing. Everything that rolls back the artificial increase in demand for medical care will, of course, operate to reduce medical costs, but there also needs to be more direct action as well. This is necessary both in order to speed up the process of cost reduction and insofar as the artificial increase in demand for medical care has led to increased government intervention into medical care and to irrational standards of medical malpractice. These latter will not go away just by means of reducing the artificial increase in demand for medical care. Nor will medical licensing and its contribution to the high cost of medical care.”

“Approaching the matter from both sides will make possible a process of mutually self-reinforcing cumulative success in bringing down medical costs. That is, not only will the rollback of the artificial increase in the demand for medical care bring down the cost of medical care, but everything that serves directly to bring down the cost of medical care will make such rollback all the more likely.”

READ the entire piece.