Category Archives: Economy

Politicians should NEVER take credit for a good economy

Obama Cautiously Takes Credit for Economic Turnaround
This makes me want to barf. No POLITICIAN should ever take credit for a good economy–not that there is a good economy now. A politician should be gracious and humble enough to thank the various AMERICAN PEOPLE who create a good economy. It isn’t Obama that does. It’s that dude that created a new hot invention, such as a new operating system or the GPS or anything.
Politicians *can’t* create a good economy. It is the wealth creators who do. Politicians can only get the hell out of the way. Clinton *never* created a good economy. Ronald Reagan, liberating the producers, created a huge economic upturn that Clinton rode off of.
Things will get worse and worse under Obama. How long do they think artificial money and cheap credit are going to keep an economy on life support? These ARE NOT substitutes for genuine wealth creation. They invariably end in a bust on down the road.

Egalitarianism and Inflation

This article is a *must* read for anyone trying to understand the current economic crisis.

Egalitarianism and Inflation by Ayn Rand

Inflation is a man-made scourge, made possible by the fact that most men do not understand it. It is a crime committed on so large a scale that its size is its protection: the integrating capacity of the victims’ minds breaks down before the magnitude—and the seeming complexity—of the crime, which permits it to be committed openly, in public. For centuries, inflation has been wrecking one country after another, yet men learn nothing, offer no resistance, and perish—not like animals driven to slaughter, but worse: like animals stampeding in search of a butcher.

Also at the end is the article “Gold and Economic Freedom” by Alan Greenspan.

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

More fear-mongering

Obama May Need Sense of Crisis to Revive Health-Care Overhaul

Sept. 4 (Bloomberg) — President Barack Obama returns to Washington next week in search of one thing that can revive his health-care overhaul: a sense of crisis.

Facing polls showing a drop in his approval, diminished support from independents, factions within his Democratic Party and a united Republican opposition, Obama must recapture the sense of urgency that led to passage of the economic rescue package in February, analysts said.

Ah, yes. The same “sense of urgency” that got jammed down Americans’ throat to give us bailout after bailout. We need to spend millions because otherwise your stocks and home prices will go down!! The same sense of urgency and fear-mongering, BTW, that Americans never bought. Overwhelmingly, Americans expressed their disapproval of the bailout with phone calls, emails, etc., to Congress which fell on deaf ears. The only people that were able to be frenzied into fear was Congress itself.

I do believe that Obama and ilk are purposely trying to sink our economic ship. It’s only in times of panic that the government is able to expand its power.

What they did not expect this time is the MUCH MORE VOCAL dissent from the American public this time around–and they keep trying to pass those protesters off as a bunch of violent, unreasonable ogres. Do Democrats seriously think that Americans can be ruled by fear? No, we can’t be: Americans are far too confident, healthy and happy. They can drum up a “sense of urgency” if they want again, but it’s only so they as politicians can sleep better at night–as if they solved some major, urgent problem.

How long can this huge disconnect between what politicians are doing and what Americans want go on? During the string of bailouts, Americans expressed their dissent–it fell on deaf ears. On tax day this year, Americans assembled in peaceful protests–Obama made no comment on it, instead holing himself up in the White House, shutting it down, and ordering the FBI to go investigate said peaceful protesters. And now, on health care, the town hall meetings are completely falling on deaf ears–with politicians pretending as if the anger of the American people is coming out of nowhere and they, the politicians, are simply innocent victims of barbaric people.

I’m still waiting for that urgent, urgent economic stimulus package to take effect …… ok, no I’m not, because, unlike any politician, I actually took the time to understand the basics of economics!!

On “stock”

I have been reading and thinking about the word (or, I should say, the concept), “stock.” Specifically, I had a vague impression that the word “stock” as in, “a grocery store keeps a stock of goods”, and the word “stock” as in, “buy stock in a company”, had to be somehow related. I wanted to clarify fully what the connection is. I think I have figured it out.

The word stock as in “a grocery store keeps a stock of goods” is pretty easy to get one’s head around. Whether it’s a grocery store or any other kind of business, their “stock” is fully produced, nonperishable goods that can be stored to sell later.  From google, “the merchandise that a shop has on hand.”

The word “stock” as in “buy stock in a company” is not as conceptually easy to get one’s head around. When one person buys “stock,” they are giving money to a fledgling business in exchange for a right to the potential profit of said business later. The investor gives money to the fledgling business in hope that the business will grow and thrive.

That money that the investor has is the key to the link between the two definitions of “stock.” How did the investor get that money? He got it by producing something himself, thus making money. That money was still available to him because he did not waste that money on consumerism but rather saved it.  In the same way that a store’s “stock” represents goods they produced but haven’t sold yet, and thus are available for future use; so the money that is used to buy stock represents goods that have been produced but not consumed yet and are thus available for future use.

There is another related concept, the concept of a “stock seed” (terminology borrowed from Ayn Rand). Stock seed is the seed a farmer keeps (i.e. doesn’t eat/consume) so that he can plant next year’s crop. Think of how a potato is grown. A potato is grown by taking a fully formed potato and, instead of eating it, planting it in the ground. It then sprouts and grows more potatoes. The “stock seed” is that portion of a potato crop that a farmer choses not to consume but rather uses to grow more potatoes.

In all three concepts of stock, stock represents already produced goods that is then used to further future sustenance.

In the farm example, how much growth do you think there would be if, instead of being able to grow a crop and keep his potatoes such that he could save some for next season’s crop, another party came in, took 1/3 of the farmer’s potatoes and redistributed them to many potato eaters–claiming that potato eaters make the world go ’round? This is exactly the philosophy of every single federal “bailout” and “economic stimulus” plan.

How big of a crop will the farmer be able to produce next year? What exactly will being given potatoes to consume “stimulate”? Is the answer that those people will perhaps take their potatoes to barter with a tomato grower, thus helping the tomato grower? The same tomato grower who had 1/3 of his crop also taken and restributed?

Taxes, bailouts and supposed economic stimuli cannot create wealth it can only shift it.  Different people will have money–that is all that will happen. Nothing gets stimulated. If you want to stimulate, you need stock seed.

This is the whole of those who try to demonize spooooooky “supply side economics,” i.e. the political philosophy that liberating producers, “suppliers” will help all in an economy. Since the philosophy of bailouts does not have a name I will call it “demand side economics,” which is the logical corollary but of course they won’t label themselves as such. Demand side economics is, like in the potato example, nothing except wealth redistribution, i.e. socialism, but cloaked in the name of “economic stimulation.” On a simple level of abstraction, it is completely obvious: people who continue to consume will eventually run out of goods and people who supply will keep the goods stocked. But when you apply it to a national economy, conceptual links break down and somehow people think consumers make the economy chug.

Every time Obama and ilk move to soak the evil, evil rich (read: the producer, the investor, the “farmer”), he moves to ruin this country’s stock seed. How long can it last? It is my fear that we will find out.

Times are GREAT …. times are AWFUL … times are GREAT ….

Obama Raises 2010 Deficit Estimate to $1.5 Trillion (Update3)

U.S. unemployment will surge to 10 percent this year and the budget deficit will be $1.5 trillion next year, both higher than previous Obama administration forecasts because of a recession that was deeper and longer than expected, White House budget chief Peter Orszag said.

Wasn’t it just last week that we were told the economy is coming out of recession???? LOL! Economic and political leaders have *no* idea what they are doing or saying.

Welcome to Jimmy Carter and the 1970s all over again. Interestingly, that is when Obama grew up and developed his ideas. I don’t know if there is a name for it, but it seems leaders of most institutions always want to make things like they were when they first entered said institution. Perhaps this explains Obama’s bizarre support for the Equal Rights Amendment??

The only shining light in all of this is after Jimmy Carter came Ronald Reagan.