Category: The Economy

How the West Was Won

Deirdre McCloskey has an outstanding article in the WSJ this weekend asking how America and other countries got rich. I hate to quote as the whole thing is worth your time, but here’s a few choice selections:

Nothing like the Great Enrichment of the past two centuries had ever happened before. Doublings of income—mere 100% betterments in the human condition—had happened often, during the glory of Greece and the grandeur of Rome, in Song China and Mughal India. But people soon fell back to the miserable routine of Afghanistan’s income nowadays, $3 or worse. A revolutionary betterment of 10,000%, taking into account everything from canned goods to antidepressants, was out of the question. Until it happened.

McCloskey asks how this happened, dispenses with the usual explanations and focus on this:

What enriched the modern world wasn’t capital stolen from workers or capital virtuously saved, nor was it institutions for routinely accumulating it. Capital and the rule of law were necessary, of course, but so was a labor force and liquid water and the arrow of time.

The capital became productive because of ideas for betterment—ideas enacted by a country carpenter or a boy telegrapher or a teenage Seattle computer whiz. As Matt Ridley put it in his book “The Rational Optimist” (2010), what happened over the past two centuries is that “ideas started having sex.” The idea of a railroad was a coupling of high-pressure steam engines with cars running on coal-mining rails. The idea for a lawn mower coupled a miniature gasoline engine with a miniature mechanical reaper. And so on, through every imaginable sort of invention. The coupling of ideas in the heads of the common people yielded an explosion of betterments.

OK. But then why did that happen? Why did human ideas, which had been basically celibate for a hundred millennia, suddenly start “having sex”? Well, something we’ve been on about in these very pages:

The answer, in a word, is “liberty.” Liberated people, it turns out, are ingenious. Slaves, serfs, subordinated women, people frozen in a hierarchy of lords or bureaucrats are not. By certain accidents of European politics, having nothing to do with deep European virtue, more and more Europeans were liberated. From Luther’s reformation through the Dutch revolt against Spain after 1568 and England’s turmoil in the Civil War of the 1640s, down to the American and French revolutions, Europeans came to believe that common people should be liberated to have a go. You might call it: life, liberty and the pursuit of happiness.

To use another big concept, what came—slowly, imperfectly—was equality. It was not an equality of outcome, which might be labeled “French” in honor of Jean-Jacques Rousseau and Thomas Piketty. It was, so to speak, “Scottish,” in honor of David Hume and Adam Smith: equality before the law and equality of social dignity. It made people bold to pursue betterments on their own account. It was, as Smith put it, “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice.”

I would particularly focus on freedom of speech and property rights. Freedom of speech allowed ideas to be communicated, now at literally the speed of light. And property rights removed the fear that communicating your ideas would deprive you of their benefits.

I’ve mentioned this before, but it’s worth rehashing: my dad did the War College in the 1980’s. He argued that classifying military technology to protect us from Soviet spies was actually a bad idea. Ideas flourish under communication; progress flourishes when ideas “have sex”. The freedom of the United States meant that we could publish our military tech secrets on the front page of Pravda and the Soviet Union would still not be able to keep up. We would always be steps ahead of them technologically because our people were free to develop and exploit those ideas while the Soviets were not. And since the Cold War ended, we’ve seen our technological progress only speed up.

Anyway, the article is worth your time. It’s inspiring. And it suggests that the way to get of our two-decade long economic doldrum is more freedom, not more regulation and redistribution.

Post-Scriptum: McCloskey, incidentally, is a trans woman. She had some great thoughts on the whole bathroom kerfuffle:

The bathroom “issue” is entirely phony. It has never been a problem. Anyway, if men wanted to sneak in (they don’t), they could always have done so, with or without North Carolina’s law. How is it to be enforced? DNA testing by the TSA at every bathroom door? Anyway, your house has a unisex bathroom, I presume, and in Europe they are not entirely uncommon—after all, the stalls have doors. Etc, etc. On both sides it is just a club to beat up the other side in the silly Cultural Wars, and to make people hate and disdain each other. Adam Smith would not have approved.

Again, the link is worth a clickthrough. Anything McCloskey writes, including grocery lists, is usually worth your time.

What Spending Restraint Looks Like

In case you think government spending is out of control and the GOP RINOs and sellouts have given spendthrift Obama everything he wants, here’s some more data to chew on: over the last five years, we have spent $2.5 trillion less than Obama was projecting in 2009, including $697 billion less in 2015 alone. That’s the equivalent of having cancelled Medicaid. And, of course, those savings become baked into future projections, which means unfunded liabilities are down by trillions as well.

Is it perfect? No. It is a huge improvement? Absolutely. If the GOP had shown this kind of spending restraint while Bush was President, we would currently be running a $400-800 billion dollar surplus right now and the national debt would be about $8 trillion smaller. And that’s with the Obama stimulus included. Without, the numbers would be even further in the black.

Spending restraint. It works.

Who would thunk it?!

The people pushing for a $15 minimum wage have assured us that the wage hike will not destroy jobs. After all, there was this one study back in the 90’s that showed that a small increase in minimum wage didn’t immediately destroy jobs. Granted, almost every other study has shown differently but, you know, A STUDY SHOWED SOMETHING. ONCE. So we’ll assume that gigantic increases in the minimum wage will have no effect, none whatso-

Oh:

Wendy’s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.

It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.

McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

It’s not surprising that some franchisees might face more of a labor-cost squeeze than company restaurants. All 258 Wendy’s restaurants in California, where the minimum wage rose to $10 an hour this year and will gradually rise to $15, are franchise-operated. Likewise, about 75% of 200-plus restaurants in New York are run by franchisees. New York’s fast-food industry wage rose to $10.50 in New York City and $9.75 in the rest of the state at the start of 2016, also on the way to $15.

Wendy’s plans to cut company-owned stores to just 5% of the total.

I hate to say I told you so, but … no, wait, I don’t hate that. I hate it when people’s lives and the nation’s economy are upended by the utterly predictable results of feel-good liberalism.

Another example of why people are bucking the establishment

For the last 7 plus years, a substantial swat of republicans both in the House and Senate ran and won their respective elections on a platform of blocking the Obama agenda, and especially the big spending and big government growing machine, only to disappoint. Case in point, this shit:

The U.S. Senate’s first spending bill of 2016 allocates $261 million more than President Barack Obama requested and lacks significant conservative amendments, but it still sailed to passage Thursday in the Republican-led chamber.

An overwhelming number of senators on both sides of the aisle approved the energy and water development appropriations bill, by a vote of 90-8. Conservatives had objected to the higher spending levels and lack of policy riders in the weeks leading up to the vote.

In the end, it didn’t seem to matter.

It’s a victory for Republican leadership and an initial step toward achieving their goal of funding the federal government by passing 12 appropriations bills.

Why the fuck pretend you are going to buck the left’s big government, ever growing nanny-state, when at every fucking opportunity the entrenched and entitled party leadership seems to do exactly the opposite? It would be one thing to find yourself in the minority and being outvoted by the collectivists, but when you up the ante and choose to fund government by some $261 million more dollars than was even requested by the hopenchange candidate, something is fucking wrong. Really fucking wrong. Why in creation’s name would the leadership do something as idiotic as this when so many of their supporters label the over spending by government and the need to get both that spending and the deficit/debt under control as a top priority? well, here you go:

Moving legislation and avoiding fights has been a top election year priority for Majority Leader Mitch McConnell. The Kentucky Republican wants the Senate to prove that Republicans can govern by avoiding a one-and-done omnibus spending package at the end of the year.

The fucking bootlickers want to impress the DNC controlled media, because I am certain that their constituency, including everyone else that understands one of our biggest problem has been the ridiculous amount of growth in government and the over spending, are not going to be impressed by their oneupmanship of the nanny state party leadership. At least some people were against this crap:

Sen. Mike Lee described the legislation as “simply unacceptable in a time of rising debt and slower economic growth.”

The Utah Republican told The Daily Signal that “we’re never going to get our nation’s rising deficits under control until we can stick to our previous agreements on spending levels,” referring to the limits set in the 2011 Budget Control Act.

Voting no along with Lee were seven other Republicans: Ted Cruz of Texas, Deb Fischer of Nebraska, Jeff Flake of Arizona, Arthur Heller of Nevada, Rand Paul of Kentucky, Ben Sasse of Nebraska, and Jeff Sessions of Alabama.

Sens. Barbara Boxer, D-Calif., and Bernie Sanders, I-Vt., did not vote.

And they wonder why more and more people are bucking the establishment and looking for outsiders instead of members the consummate political aristocracy which all seem to be corrupt to one degree or another, regardless of party affiliation. Selling yourself as the less corrupt party isn’t going to work much anymore..

Pro-collectivist media can’t avoid making exuses

It came as no surprise to me that after a decade plus of favorable pro-collectivist media coverage of shit-holes that took hard left turns we found out Venezuela was following in the footsteps of illustrious collectivist success stories like Cuba, North Korea, or Zimbabwe. What is less known is that the other South American country that had also taken a hard left turn and was touted as a great success story, Brazil, is also heading in the same direction now that blatant corruption and mismanagement practices have come to the world’s attention.

As is always the case with progressive governments, the pretense that the shit they do is to help the less fortunate is just that: pretense. What they are really doing is creating a system that will allow the political aristocracy and those few lucky enough to be connected to them, to rob the people blind. The new masters tend to be worse than the old ones, and while they can temporarily hide the rot, eventually economic and human nature reality asserts itself. Big and powerful government, especially one that has successfully disarmed the masses and then pretends their wealth transfer schemes are to help the less fortunate, sooner than later results in abused people. Yeah, I know that this piece specifically was written about the Arab world, but the article does speak of other corruption failures in general. The problem with people that advocate for collectivism is the fact that they seem to miss that corruption is the norm, and having little or none of it, is actually an outlier. And the bigger an autocratic government that abrogates the duty of creating economic justice becomes, both in terms of actual size and the amount of money it now forces through its hands, the more corruption you will get.

For example, take China, which is still run by an authoritarian government that decided not to stick to the letter of marxist dogma. While the Wiki article tries its best to show how fucked up China is because of this corruption, it, because of the bias of the Wiki organization in general, does a lot to apologize and conceal that the problem there is the authoritarian and collectivist system that creates the framework that allows this corruption. When your government is all powerful and has its hands in everything, you can bet it will result in abuse and corruption by the very elite put in charge. Pick your country, check out how authoritative and big their government is, then look at how much wealth redistribution power said government has, and you will find corruption.

But back to what I wanted to point out: AP writing an article that tries hard to not tie the corruption now evident to the ideology or failures in Brazil. From the article:

Brazil’s Senate voted on Thursday to put leftist President Dilma Rousseff on trial in a historic decision brought on by a deep recession and a corruption scandal that will now confront her successor, Vice President Michel Temer.

With Rousseff to be suspended during the Senate trial for allegedly breaking budget rules, the centrist Temer will take the helm of a country that again finds itself mired in political and economic volatility after a recent decade of prosperity.

The 55-22 vote ends more than 13 years of rule by the left-wing Workers Party, which rose from Brazil’s labor movement and helped pull millions of people out of poverty before seeing many of its leaders tainted by corruption investigations.

My interpretation of this nonsense is that it almost sounds like AP is trying hard to tell readers we should give the corrupt officials a pass because they meant well. After all, they helped the poor people! I constantly see MSM stories saying how well off people in Brazil have it because of the wealth redistribution schemes of the leftists, but when I look the stuff that sticks with me is the rampant crime, the fact that economic promises are not materializing, and how despite the claims that the poor are better off, I see very few things that really show that to be the case. Especially when you look at the future. That’s not just me however, as this verya rticle points out:

In addition to the gaping deficit, equal to more than 10 percent of its annual economic output, Brazil is suffering from rising unemployment, plummeting investment and a projected economic contraction of more than 3 percent this year.

Basically the Brazilian success story was to borrow and print money, over spend, and put polities in practice that drastically hamper economic growth and result in rampant unemployment. Shit they are even looking at an economic contraction. Does this not sound kind of like the Obama economic plan to spend us out of a recession and even into prosperity? Don’t worry though, because the PA tells us people are on top of the crisis;

“Only major reforms can keep Brazil from moving from crisis to crisis,” says Eduardo Giannetti da Fonseca, an economist and author in São Paulo who has written extensively about the country’s socioeconomic problems.

While I am not very familiar with this individual, the fact that he is the one AP chose to quote tells me this guy is very likely to be the Brazilian Paul Krugman, whose usual retort when confronted with the failures of Keynesian wealth transfer schemes, advises that the the problem was not the fact that borrowing/printing more money/spending money you don’t have can’t buy your prosperity, but that government didn’t borrow/print/spend enough money. This shit doesn’t work. It never has, and never will, but the collectivist driven media still wants you to have faith in this crap. This AP article sure goes a long way to try and avoid making the point that these leftist SJW wealth redistribution policies failed Brazil despite the temporary bump they produced obvious.

Another tidbit from the article that I found interesting was the following:

Brazilian markets have for weeks rallied as investors welcomed the likely dismissal of a president they believe crippled the economy, but were largely unchanged on Wednesday.

Note that the AP avoids saying why investors felt Rousseff crippled the economy. One could come away thinking the only problem was the endemic corruption, but the fact is that this was just one of the symptoms of the real problem: the Keynesian economic practices leftists resort to in times of trouble to hide the problems caused by their wealth transfer schemes. Brazil is on the same path as Venezuela right now, only it might be slower to reach the end state because they didn’t choose to have a dictator hold all the power like the Venezuelan’s did. This shit don’t work people.

Study makes the wrong conclusion.

I was quite baffled when I saw the title for a study posted on science daily that reported that “Skepticism about climate change may be linked to concerns about economy” because while I am certain that in good economic times people are less resistant to government fleecing, I still have a hard time believing people would buy the AGW lies. from the article I see the following declaration:

Americans may be more likely to accept the scientific evidence of human-caused climate change and its potentially devastating effects if they believe the economy is strong and stable, according to new research published by the American Psychological Association.

I could not fathom any study that would produce these results, and immediately suspected some kind of bullshit. My first inclination was that they very likely had loaded questions designed to illicit responses that would allow them to make this ludicrous claim. After all, there is a historical precedent that most people are willing to tolerate a heavier hand from Uncle Sam, the one going straight into their pockets where they keep their money, when their own income and potential for income looks good. I can see a study rigged to use that mechanism to make this idiotic claim that resistance to this nonsense and the political agenda is economic, but I wanted details, so I decided to take a closer look at the article, and the answer was right there. This was a bunch of bullshit wrapped in pretty paper to sell another lie. let’s start with this:

In an experiment conducted online, 187 Americans ranging from 18 to 70 years old watched a newscast with skeptical commentary about a NASA documentary on climate change. Participants who more enthusiastically supported the capitalist system were more dubious about climate change, and they misremembered facts from the newscast about the severity of climate change. Conversely, participants who were more critical of the capitalist system and more interested in social change recalled the information about climate change as being even more severe than the facts that were presented.

So first off, let me point out that the “mischaracterization” made by this idiot author about how supporters of the capitalist system were more likely to “misremember facts” or “not grasp the severity of the problem”, was nothing but his biased attempt to discredit people that pointed out what they were shown was a pile of bullshit. The likely scenario is that these people, less ruled by fucking feelings, pointed out that this cult is based on a well orchestrated campaign of falsehoods, flawed models and systems, manipulation of the facts and data to create a desired results, a peer review circle jerk, the demonization of anyone not willing to let them get away with this shit, and that not a single one of the horribly exaggerated effects have come to pass, isn’t “misremembering” or “not seeing the gravity of the situation”, but pointing out why this thing is a scam. Cultists don’t like that.

I also am not surprised people that saw the inherent value of the capitalist system were less prone to bullshit than their collectivist counterparts, because it has always been obvious to me that collectivists tend to be ruled by emotion and emotional appeal. Show a bunch of collectivist twits a fictional piece like Al Gore’s idiotic movie, hilariously titled “An inconvenient truth” of all things, that proposes draconian collectivism to deal with the coming apocalypse, and one shouldn’t be surprised these twits gobble up that shit sandwich either.

Anyway, back to the point here. The study, as practically every one of these pro AGW propaganda pieces tends to do, made a totally wrong conclusion from what they saw. The conclusion they should have made was that people inclined to believe the unwashed masses have a right to use government force to steal from the productive to benefit themselves are far more likely to buy a pack of lies when it pushes their agenda, while those that don’t buy theft by government and totalitarianism as good, are far less likely to fall for that bullshit.

Next we get the following doozy:

In another experiment, with 57 college students, participants were divided into two groups: One read a statement that the federal government had very broad power to influence the economy and the availability of jobs; the other, a statement that the government’s power was limited. The participants then read a news article that recounted some errors that were inadvertently included in a scientific report on climate change. Participants who thought the economy had a strong influence on their lives were more skeptical about climate change and were less likely to remember facts from the news article about the severity of climate change.

In a third experiment, with 203 college students, one group listened to a podcast that reported the U.S. economy had recovered from the recession, another group heard the recession was continuing, and a control group didn’t hear any podcast. All of the participants then watched a NASA documentary about scientific evidence of climate change before completing a survey about their support for the current U.S. economic system. Participants who more strongly endorsed the legitimacy of the economic system were more likely to believe in the severity of climate change only when they thought the economy was strong and stable.

Let me start by pointing out that when you pick a bunch of college students that are not in engineering, math, physics, chemistry, medicine, accounting, or something that actually involves not just regurgitating bullshit liberal dogma, for their opinion on things scientific, you shouldn’t be surprised to see the stupidity the experimenters did. I am sorry, but “Studies” or “Poli Sci” majors are neither hard science types nor – yes it is my opinion – really learning anything of value outside an artificial world created by the grand collectivist machine. They are a plague on the universe. I should have probably at the point of the realization how unscientific this scientifc study was, just moved on to something less brain damaging than this idiocy, but I couldn’t pass the opportunity to showcase what we are dealing with here.

In the first example, where they used some college students that were likely some 7 year geniuses of the humanities fields, we should begin with the fact that nobody with any common sense would buy the idiocy that government, by its very nature, has any form of control on economic activity, other than to impede, degrade, or piss away tons of tax payer dollars on it. But it remains baffling to me that this experiment led to the conclusion that good economic metrics influence people to dismiss the AGW bullshit. Again, I see that the correlation here isn’t faith in good economic times over AGW dystopia as much as how much more inclined someone was to accept the AGW nonsense as gospel if they lacked a solid grasp of economics and the impact of government on that activity.

If anything, the third experiment shows that the AGW cult is bull. Believers are far more likely to endorse the agenda while they felt they had little to lose and a lot to gain from the wealth transfer agenda behind the AGW movement. But as happens in real life, as soon as things got good for them, they were far likely to want that wealth transfer. Seriously, if you take a look at the supporters of Bernie Sanders and then at the supporters of Donald Trump, the big difference is the fact that the Sanders camp is comprised of people that are in deep debt and are looking for someone to bail them out (lots of jobless humanities students with big loan debt), while the other camp lacks that crowd.

These experiments should have concluded that collectivist are far more likely to like collectivist agendas when they gain from them, and much less likely to do anything but pay lip service to them when they find out they will foot the bill. Also that non-collectivists will focus on the reality of economics and human nature over some apocalyptic fantasies collectivists hope will convince people to let them fuck us all over.

Let it burn…

So as was expected, Puerto Rico defaulted on a debt payment for over $70 billion in outstanding debt. From the article:

Puerto Rico, whose residents are U.S. citizens, has been mired in recession for a decade and borrowed heavily to balance budgets. Despite the shaky economy, investors snapped up its debt for years thanks to generous tax incentives. The borrowing spree, however, did little to create economic opportunity on the island, and residents have steadily left for employment on the U.S. mainland, eroding Puerto Rico’s tax base.

So this problem was caused by leftist government that wanted to spend more than the economies they crippled could sustain, to buy votes of all reasons, borrowed massive amounts of money to balance their budgets. Does this sound familiar to you at all? At least some Puerto Ricans affected by this stupidity had the ability to skip town and go to the US, whether it was to find gainful employment or just move to some blue state and suck at the government’s teat there, to avoid the catastrophe. Where are those of us in the US going to go when we face this reality?

Government economic policy that is set up to make participants in any economy dependent on buying favors from the members of said governments, always end up producing pain and do little to produce economic growth. But it sure makes a lot of connected people wealthy and in turn puts a large amount of cash into the campaign coffers of the political class that has implemented this machine. Hence, despite the massive debt buyout in Puerto Rico, there was no economic benefit. Again I ask, does this all look familiar to anyone? It seems quite obvious that what we are seeing in Puerto Rico can directly be inferred as the future of many US blue states as well as the US economy in general under the Obama administration.

Back to this issue at hand. As the article points out, republicans rallied by Paul Ryan in congress are pushing legislation that would restructure Puerto Rico’s debt. My concern is that this is nothing more than a totally temporary bandaid solution, and that it will not only not fix the underlying issue, which is that these fuckers will keep borrowing to buy votes and do nothing that would fix their abysmal economic conditions, but just delay the inevitable: Puerto Rico basically asking the US tax payer to foot the bill for all the squandered money. I feel this way because of news like this. And once Puerto Rico gets what amounts to a bailout, you can bet that Illinois, California, and every other blue state out there that has the same model of borrowing so they can spend on vote buying while all that spent money does nothing to improve economic conditions in general, will all show up in DC and ask for the same.

Whatever crap congress puts together should also destroy the blue state economic model as it exists today. Without that, we are just pushing the problem out and increasing the final cost of bailing out these idiots. The blue state model needs to die before it kills the country as a whole.

Replace with Obamacare for a view of our future healthcare system

The future of Obamacare, which should have been repealed in toto had it not been for Obama’s veto in January of this year, and which now obviously after such abysmal failures and fiscal disasters shows clearly that it was intended from the start to destroy healthcare as we know it in the US so the left could force a single-payer system on us, will end up looking like this:

The UK has one of the worst healthcare systems in the developed world according to a damning new report which said the nation has an “outstandingly poor” record of preventing ill health.

Hospitals are now so short-staffed and underequipped that people are also dying needlessly because of a chronic lack of investment. The verdict, from the Organisation for Economic Co-operation and Development (OECD), will make embarrassing reading for David Cameron who denied the cash-strapped NHS is heading for its worst winter crisis.

Staff are too rushed to improve levels of care that have in many areas fallen below countries such as Turkey, Portugal and Poland. Almost 75,000 more doctors and nurses are needed to match standards in similar countries the OECD said in its annual Health at a Glance study comparing the quality of healthcare across 34 countries.

While access to care is “generally good” the quality of care in the UK is “poor to mediocre” across several key health areas, obesity levels are “dire” and the NHS struggles to get even the “basics” right, the report said citing a lack of investment over the last six years.

Britain was placed on a par with Chile and Poland as countries still lagging behind the best performers in survival following diagnosis for different types of cancer. The UK came 21st out of 23 countries on cervical cancer survival, 20th out of 23 countries on breast and bowel cancer survival and 19th out of 31 countries on stroke.

Here is the takeaway from this obvious revelation of fact: in a system that measures success of a given healthcare system with metrics that are heavily skewed/biased to favor collectivist bullshit over actual performance, the British healthcare system, which is a collectivist government controlled healthcare’s dream state, fails abysmally. It always comes down to the fact that there are limited resources and cash, and too many people that want free shit. When government takes over allocation of the limited resources, it always goes bad. Fucking always. In places where abundance masks the fact that there is an economic reality it might take longer to show that, but eventually it will be shown, as is the case here.

Things are going to go from bad to worse in this country because of the direction forced on us. Obama, was our Lenin. If Hillary wins, she will be our Stalin, and she is gonna do it with gusto. The problem is that whatever it may be we are fucked with these people.

Reality always bites…

Back in the day the collectivist cheerleaders told us this to sell their garbage. Reality is things like this, and then things like this.

Collectivist, SJW type revolutions are sold as trying to make it better for the masses, but the truth is that it is about replacing the people in charge with new ones whom practically always take abuse and misery of the masses to new levels. I hope Venezuelans know how to make pruno, cause life is about to get even worse for the masses without that Polar crap swill.

Collectivism is evil, but I am sure this is somehow Boosh’s fault…