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Tuesday, August 31, 2010
Bush’s Iraqi Surge Worked; Obama’s Stimulus Failed
But Obama’s failed, inflationary stimulus program costs more than the entire war in Iraq.
Monday, August 30, 2010
Keynesian Obamanomics Outperformed
Germany’s economy is recovering faster than ours, as noted by Professor Allan H. Meltzer in a recent posting.
Like a broken clock that displays the correct time twice a day, David Brooks gets it right.
Mr. Brooks is a liberal-progressive columnist for the New York Times, where, in contrast to his confreres, he sometimes appears to be a counter-balancing voice of conservatism. As he notes, German political leaders have rebuffed President Obama’s insistent demands that they too open the money spigots and, following the advice of Paul Krugman, another New York Times columnist, drown the economy in debased fiat dollars.
Ironically, Germany has long been one of the world’s most consistently socialist nations. In the middle 1800s, Ferdinand Lassalle created and led Europe’s strongest socialist political party, the General Union of German Workers. Hitler’s political base in the 1920s onward was the National Socialist German Workers Party. Even Ludwig Erhard’s “social market system” that revived Germany’s economy after World War II was a far-left welfare state with elements of fiscal conservatism.
That fiscal conservatism arises from Germany’s horrific hyperinflation in the 1920s and early 1930s, when Weimar Republic socialists employed the governmental deficit, stimulus spending model that John Maynard Keynes began to articulate after the end of World War I. It was Weimar’s fiscal profligacy and its inevitable inflation that gave Hitler a strong boost.
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Coming Back To God
Anyone who has studied the Bible’s Old Testament knows what happens to a people who forget God and come to believe pridefully in their self-sufficiency. The United States has long since reached that dangerous point.
Jeff Lukens’s essay should have been posted before the Glenn Beck rally in D.C. But its message is just as relevant now as before the rally.
Restoring Honor: A New American Awakening?
By Jeff Lukens
If anything good can be said about the progressive left controlling our government, it’s that their astonishingly brazen and heavy-handed tactics may have aroused the American people into a new spiritual awakening. With basic liberties under assault, we are seeing a revival of values that have been dormant for a long time.
Every great moment in this country, when real progress is made, there was a spiritual awakening. The Restoring Honor Rally in Washington D.C. on August 28 may be the one of those moments. The rally
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Sunday, August 29, 2010
Left-Wing Bigotry: The Muslim Cultural Center At 9/11 Ground Zero
Read Andrew Klavan"s discussion of
Sunday, August 15, 2010
Obamanomics Still Mired In The 1930s
Even socialist Europe has abandoned simplistic Keynesian “pump priming.”
Professor Thomas Emerson forwarded this Wall Street Journal opinion piece by his Carnegie-Mellon colleague.
Europe Jumps Off the Keynesian Bus
The economy is looking bright in Britain and Germany after those governments announced plans to reduce spending.
August 12, 2010
By ALLAN H. MELTZER
President Obama is the victim of bad advice and misinformation. From his advisers, the Democratic caucus and the New York Times, he hears that markets have failed and the country needs more government spending to increase consumer spending. He is told that any plan to reduce government spending and the deficit will bring on another recession and even a new Great Depression. And he repeats the foolish claim that, since the rich spend a much smaller proportion of their incomes, it is good for the country to raise their tax rates.
Nonsense. After Britain’s new government announced a multiyear program to reduce government spending, the pound rose against the dollar and the economy continues to expand across the board.
In the euro area, Germany has reduced the growth of government spending to bring down the budget deficit. Following the recent announcement of a credible, long-term German program to reduce future deficits, the euro appreciated strongly against the dollar. Forecasters expect a surge in second-quarter growth when it is reported later this month. A rebound in construction and investment in machinery and equipment shows renewed optimism.
The Obama program and its advocates reflect the views of 1950s-era Keynesians, but ignore the major development in economics of the past 40 years. Modern economics differs from the past by carefully integrating expectations about the future into dynamic economic models.
The simple-minded views used to justify more government spending fail to recognize that people are not dumb beasts. Told that the government will spend more, many will expect to pay higher taxes in the future.
Investors will ask what taxes will be when today’s investments earn returns two, three or more years in the future. If the spending is as wasteful as the failed 2009 stimulus, the economy will continue to stagnate and investment will be deferred.
The billions spent after passage of the 2009 stimulus had a modest economic result at best, because the money was mainly a redistribution of income that did not induce growth. Replacing state budget deficits with federal deficits has a “multiplier” effect of nearly zero.
The teachers whose jobs are saved recognize that the benefit lasts one year. They are unlikely to buy a new car or a new house. Temporary benefits like temporary tax cuts do not produce sustained growth.
Meanwhile, the unsustainable debt held by foreigners that has built up over past decades must be serviced. That requires increased exports. Instead of wasteful programs, the administration should offer a credible plan to reduce spending and current and future budget deficits. As in Germany and the U.K., that will reduce uncertainty about future tax rates and encourage investment.
Right now, businesses are investing to reduce costs for health care and employee benefits by increasing labor-saving capital. That maintains profits despite continued slow growth, but increases layoffs and unemployment. They see what the administration and Congress do, and they protect themselves as best they can.
Policy makers can reduce uncertainty about future costs by putting a moratorium on new regulation unless it is approved by a supermajority of Congress. Meanwhile, there has to be a recognition that bashing business and blaming the Bush administration for economic problems create less confidence about the future and are counterproductive. They do nothing to end high unemployment.
Mr. Meltzer is a professor of economics at Carnegie Mellon University, a visiting scholar at the American Enterprise Institute, and the author of “A History of the Federal Reserve” (University of Chicago Press, 2003 and 2010).
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Wednesday, August 11, 2010
The Renewable Electricity Standard Is a Hoax, a Fraud, and a Rip-Off
Read S. Fred Singer’s essay.
Fed Throws In The Towel
With few, or no, untried monetary policy tricks to perform, for now the Fed will stick to funding Federal deficit spending with fiat dollars created out of thin air.
Tuesday, August 10, 2010
Let ‘em Eat Cake
I’m indebted to Carnegie-Mellon Professor Tom Emerson for a British view of usurpation by the Obama administration.
U.K. Telegraph reporter Nile Gardiner describes the European view of Obama’s high-handed governance.
Quote:
...I would wager that the author of L
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What Are They Aiming To Do?
Democrat/Socialists talk about lowering unemployment, but their fiscal and monetary policies impede creation of jobs and re-hiring of laid-off workers. It should be obvious by now that reducing unemployment is not their objective.
Faced with a major recession, Obama’s priority was not jobs. He left it to Nancy Pelosi and Harry Reid to enlarge George W. Bush’s stimulus efforts, to concoct a program of which the main effect has been pork-barreling and spending to benefit Democrat/Socialist special interest groups.
Obama chose, instead, to focus his energies upon socializing medical care. The president and his Democrat/Socialist colleagues struggled frantically, ahead of upcoming November elections, to enchain the nation with socialistic bureaucracies so broad and so deep that they cannot be undone by future administration, so pervasive and invasive that returning the nation to a new growth path will be impossible. Socialized medicine, nationalization of the banking system, control of energy sources and uses, flooding the nation with millions more illegal immigrants (who will be converted to Democrat/Socialist voters), resurgence of socialistic labor unions, fortifying the tort bar, subordinating our statute law and the Constitution to the world-government socialist international, and outlawing Judaism and Christianity are more important to them than the economic revival and survival of the United States.
The convergence point of these initiatives is bringing private business under an updated Fascist state corporatism of the sort that Mussolini imposed upon Italy in the 1920s and Franklin Roosevelt instituted here under the, happily, short-lived National Recovery Administration during the 1930s. In those days, Fascist state corporatism was exercised through government regulated industry councils in which management and labor unions created industry codes of prices, hours of work, workers’ pay rates, and production volumes.
Today’s Fascist state corporatism under Obama involves industry czars calling the shots behind the scenes at banks, automobile companies, and petroleum and coal companies. The United States government and its labor union proxies take major ownership positions in and becomes the banker for those private enterprises swept into the socialist orbit.
As Franklin Roosevelt demonstrated in the New Deal, Federal courts eventually will condone almost any degree of stretching the Constitution’s commerce clause. Darwinian evolution implies, as Karl Marx in the 1860s and American progressives in the early 1900s theorized, that the Constitution’s meaning changes from day to day. Judicial activism becomes a sort of natural selection mechanism to weed out original constitutional conceptions of individual rights against arbitrary government exercise of power.
In addition, under Democrat/Socialists’ liberal-progressivism, the government tries to confiscate as much of income from high net worth, high income citizens as possible, and then to transfer that income to Democrat/Socialist voters. Among other things, this will reduce or eliminate private savings, and leave the Federal government more firmly ensconced in the economic driver’s seat, free to pick industry winners and losers without interference from a domestic free market. Having dispensed with the Fifth Amendment’s private property rights and old fashioned concepts such as profitability and return on investment, Democrat/Socialists will be able to promote money-losing, economy-wrecking “green” jobs.
Abetted by our secular and socialist educational system, in another generation Democrat/Socialists will have completed the transformation of the United States into a third-rate, socialist nation like France. Unless, of course, voters finally come to understand what Franklin Roosevelt set in motion during the 1930s Depression.
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Monday, August 09, 2010
Obamacare Considered As Dispassionately As Possible
Will it really reduce costs of medical care? Is it, instead, pie-in-the-sky?
If it really will reduce costs, why has Massachusetts’s similar program led to punishing cost increases? According to a Wall Street Journal op-ed piece (The Failure of RomneyCare, March 16, 2010):
One third of state residents polled by Harvard researchers in a study published in “Health Affairs” in 2008 said that their health costs had gone up as a result of the 2006 reforms. A typical family of four today faces total annual health costs of nearly $13,788, the highest in the country. Per capita spending is 27% higher than the national average.
