*Aquinas and the Market: Toward a Humane Economy*
40 minutes ago
These empirical studies leave many leading economists dubious about the ability of government spending to boost the economy in the short run. Worse, the large long-term costs of debt-financed spending are ignored in most studies of short-run fiscal stimulus and even more so in the political debate.Only time will tell if we will see Keynesianism again recede.
The sovereign debt crisis now threatening Europe, as well as major American states and cities, discloses the sheer incompetence of a political class that has over-promised, under-delivered and squandered vast amounts of their citizens' wealth.That really gets to the heart of the matter, doesn't it?
A 23-year-old Russian man accused by U.S. authorities of generating nearly a third of the spam e-mails worldwide is expected to be arraigned Friday in a Milwaukee Court.
I've written toward a master's degree in cognitive psychology, a Ph.D. in sociology, and a handful of postgraduate credits in international diplomacy. I've worked on bachelor's degrees in hospitality, business administration, and accounting. I've written for courses in history, cinema, labor relations, pharmacology, theology, sports management, maritime security, airline services, sustainability, municipal budgeting, marketing, philosophy, ethics, Eastern religion, postmodern architecture, anthropology, literature, and public administration. I've attended three dozen online universities. I've completed 12 graduate theses of 50 pages or more. All for someone else.
From my experience, three demographic groups seek out my services: the English-as-second-language student; the hopelessly deficient student; and the lazy rich kid.
...it's hard to determine which course of study is most infested with cheating. But I'd say education is the worst.
there are no signs of a dramatic rebound for the party, and the chance of Republicans winning control of either chamber in the 2010 midterm elections is zero. Not "close to zero." Not "slight" or "small." Zero.Making predictions is risky, which is why I try to avoid them. However, when someone makes a prediction that turns out correctly, that person deserves to be taken more seriously in the future. The correct prediction shows that they have understanding. Obviously when a person's predictions are completely wrong, that person should lose credibility because the failed prediction shows that their understanding of the situation is flawed.
Two people were found to have filed multiple W-2 forms that made them into multibillionaires, an agency official said yesterday. Those reports threw statistical wage tables out of whack and, in figures released Oct. 15, made it appear that top U.S. earners had seen their pay quintuple in 2009 to an average of $519 million.
The agency yesterday released corrected tables that showed the average incomes of the top earners, in fact, declined 7.7 percent to $84 million each.
Netflix's streaming service has become so popular that it is now the largest source of U.S. Internet traffic during peak evening hours, according to Sandvine Inc., a Canadian company that supplies traffic-management equipment to Internet service providers.
Streaming by Netflix subscribers accounted for about one-fifth of that peak-time traffic, more than double the volume flowing from Google Inc.'s YouTube, Sandvine said.
Yet there are millions of cases of steroid use that occur daily with barely a second thought: Millions of women take birth control pills, blithely unaware that their effects may be subtly seeping into and modulating brain structure and activity.It is ironic that so many people are so concerned with minute traces of man-made chemicals in the environment but think nothing of dousing themselves with huge dozes of man-made chemicals that are prescribed by their doctors.
The possibility that an accepted form of chemical contraception has the ability to alter the gross structure of the human brain is a cause for concern, even if the changes seem benign -- for the moment.
The cyber worm, called Stuxnet, has been the object of intense study since its detection in June. As more has become known about it, alarm about its capabilities and purpose have grown. Some top cyber security experts now say Stuxnet's arrival heralds something blindingly new: a cyber weapon created to cross from the digital realm to the physical world – to destroy something.
The appearance of Stuxnet created a ripple of amazement among computer security experts. Too large, too encrypted, too complex to be immediately understood, it employed amazing new tricks, like taking control of a computer system without the user taking any action or clicking any button other than inserting an infected memory stick. Experts say it took a massive expenditure of time, money, and software engineering talent to identify and exploit such vulnerabilities in industrial control software systems.
Stuxnet's ability to autonomously and without human assistance discriminate among industrial computer systems is telling. It means, says Langner, that it is looking for one specific place and time to attack one specific factory or power plant in the entire world.
This is not to deny that the Obama presidency has been ruinous. But sometimes the costliest mistakes are those from which we learn the most.
Mr Dikötter, who has been studying Chinese rural history from 1958 to 1962, when the nation was facing a famine, compared the systematic torture, brutality, starvation and killing of Chinese peasants to the Second World War in its magnitude. At least 45 million people were worked, starved or beaten to death in China over these four years; the worldwide death toll of the Second World War was 55 million.
His book, Mao's Great Famine; The Story of China's Most Devastating Catastrophe, reveals that while this is a part of history that has been "quite forgotten" in the official memory of the People's Republic of China, there was a "staggering degree of violence" that was, remarkably, carefully catalogued in Public Security Bureau reports, which featured among the provincial archives he studied. In them, he found that the members of the rural farming communities were seen by the Party merely as "digits", or a faceless workforce. For those who committed any acts of disobedience, however minor, the punishments were huge.....People were forced to work naked in the middle of winter; 80 per cent of all the villagers in one region of a quarter of a million Chinese were banned from the official canteen because they were too old or ill to be effective workers, so were deliberately starved to death.
Following the embarrassing news that Mayor Dave Bing’s GMC Yukon was hijacked by criminals this week, Detroit’s Channel 7 reports that the Reverend’s Caddy Escalade SUV was stolen and stripped of its wheels while he was in town last weekend with the UAW’s militant President Bob King leading the “Jobs, Justice, and Peace” march promoting government-funded green jobs.
Read that again: Jackson’s Caddy SUV was stripped while he was in town promoting green jobs.
Real jobs produced big, profitable SUVs like the one Jesse prefers to ride in. His SUV has been stripped by thugs – a fitting metaphor for what Jesse and his pals have done to the auto industry for the last 35 years.
Today, most of what is written about economics in Catholic circles is painful to read. The failing extends left and right, as likely to appear in "progressive" or "traditionalist" publications. In book publishing, the problem is so pervasive that it is difficult to review the newest batch.His hypothesis is that in religious thought many things are not scarce goods but rather either free or public good and thus religious writers are not used to dealing with economics questions that arrive from scarcity:
These are goods like salvation, the intercession of saints, prayers of an infinitely replicable nature, texts, images, and songs that constitute non-scarce goods, the nature of which requires no rationing, allocation, and choices regarding their distribution.I accept his premise that a lot of Catholic writing shows no understanding of economics, and many of the comments left on his post re-enforce his premise--they are painful to read if you understand economics. I think there is an element of truth in his theory, but I also think there are at least two other factors that help explain the awfulness of Catholic economic understanding.
The reason for this rhetorical disparity is that conservatives and libertarians seem to have a much better grounding in the idea that they have a political ideology. Liberals lack this sense, believing their ideology to be literally incommensurable to other ideologies. To oppose liberalism is thus not only intellectually incorrect, it is also an affront to common decency.In other words, he says that liberals suffer from what has been called epistemic closure.
By putting politics over profitability, the media left alienated viewers and readers exactly during the critical transition period when it needed them most. And the worse its fortunes grow, the more radical its politics have become.
When it came to a showdown between the principles of journalism and the principles of liberalism-- journalism never stood a chance. And all that was left was shrill political advocacy, propaganda if you will. Numerous stories praising their politicians and their cultural figures. Numerous other stories damning opposition politicians and elements of culture that displeased them. And the costs to the nation were high. The same media that did everything possible to destroy McCain and Palin, also portrayed Obama as a visionary leader, even though he had barely nailed down 100 days in the Senate before running for President.
I just submitted a review via your website at www.choicemag.org. I guess no one has ever mentioned that when you get to the end of the process, there is a link at the bottom that says "Choice Home Page." Clicking that link gets you to a error page that says "Sorry, Page Not Found."I got back this response:
It is rather amazing that this bad link is still there, but maybe it is there because no one has ever bothered to report it.
Thanks very much for notifying us about this broken link. You are the first to report it! The CHOICE home page was redesigned about a year ago and the URL changed, and apparently we missed updating this link.Research says that it is economists who free-ride, but in this case for a year no one took the time to report this little glitch even though hundreds of people from almost every academic discipline must have encountered it. The cost of the error to any one individual was minimal, but the overall benefit of fixing the error was certainly greater than the individual cost of reporting it. It was finally fixed when an economist took the time to do what was good for the group and report the problem.
I'll report it to our tech people.
Robinson: You are quoted in the Boston Globe, "I like Obama but I reject the suggestion that he is an intellectual. He is an activist merely mimicking the mannerisms of an intellectual." How good is Obama's mind?I still do not know exactly what that a clever "means-ends" mind is.
Epstein: His mind is pretty good, but it is a clever "means-ends" mind. He has never written a scholarly article in his entire life.
But, the difficulty you get, for someone who has only worked in that situation, is that he believes the creation of private wealth is something the government cannot influence or destroy. He has many fancy redistribution schemes, in addition to his health plan and new labor laws, which are all wealth killers.
Mr. Mokyr's answer—articulated in densely packed but gratifyingly lucid prose—is that in Britain ideas interacted vigorously with business interests in "a positive feedback loop that created the greatest sea change in economic history since the advent of culture."Implicit in this argument is that countries that cannot develop are locked in a rent-seeking trap, and my limited knowledge of economic develop suggests that is a plausible argument. Unfortunately, rent seeking seems to be increasing in the U.S. If there a feedback loop in which rent-seeking in some way creates more rent seeking, then deep pessimism is in order.
The reason for Britain's exceptionalism, Mr. Mokyr says, lies in the increasing hostility to rent-seeking—the use of political power to redistribute rather than create wealth—among the country's most important intellectuals in the second half of the 18th century. Indeed, a host of liberal ideas, in the classic sense, took hold: the rejection of mercantilism's closed markets, the weakening of guilds and the expansion of internal free trade, and robust physical and intellectual property rights all put Britain far ahead of France, where violent revolution was needed to disrupt the privileges of the old regime.
Slowly, the nation has recovered its poise. There is a widespread sense of unstated embarrassment that a political majority, if only for a moment, fell for the promise of an untested redeemer—a belief alien to the temperament of this so practical and sober a nation.I know people who still cling to the belief that we have a redeemer as POTUS.
But as other countries’ experiences show, it is also possible that investors would lose confidence abruptly and interest rates on government debt would rise sharply. The exact point at which such a crisis might occur for the United States is unknown, in part because the ratio of federal debt to GDP is climbing into unfamiliar territory and in part because the risk of a crisis is influenced by a number of other factors, including the government’s long-term budget outlook, its near-term borrowing needs, and the health of the economy. When fiscal crises do occur, they often happen during an economic downturn, which amplifies the difficulties of adjusting fiscal policy in response.The most arresting passage in the piece, though, was this one:
According to the Congressional Budget Office’s (CBO’s) projections, federal debt held by the public will stand at 62 percent of GDP at the end of fiscal year 2010, having risen from 36 percent at the end of fiscal year 2007, just before the recession began. In only one other period in U.S. history—during and shortly after World War II—has that figure exceeded 50 percent.The Democrats want to blame Bush for this, but there is an inconvenient truth that they have to ignore to do that: they captured control of congress in the 2006 elections and have had control the purse strings since then.
A lot of criticism of academia hasn't stuck in the past, Mr. Hacker and Ms. Dreifus imply, because people have almost unthinkingly believed in the economic power of the degree. Yes, you didn't learn a lot, and the professors blew you off—the reasoning went—but if you got a diploma the job offers would follow. But that logic may no longer be so compelling. With the economy tightening and tales of graduates stuck in low-paying jobs with $50,000 in student loans, college doesn't look like an automatic bargain.There is also an interesting comment on salary differences in academia, which is the center of concern about fairness in pay:
Take the adjunct issue. Everyone knows that colleges increasingly staff courses with part-time instructors who earn meager pay and no benefits. But who wants to eliminate the practice? Administrators like it because it saves money, professors because it saves them from teaching labor-intensive courses. And adjuncts themselves would rather continue at minimum wage than leave the profession altogether. In a "coda," Mr. Hacker and Ms. Dreifus declare that "it is immoral and unseemly to have a person teaching exactly the same class as an ensconced faculty member, but for one-sixth the pay."It is interesting that although the faculty at the elite colleges fret over the inequalities of American, they are an important part of the system that promotes inequality.
In the past three months, Amazon has sold 143 Kindle books for every 100 hardcover books, the company said. In July, sales of e-books accelerated to 180 sold for every 100 hardcover versions. Kindle book sales this year have also exceeded broader e-book sales growth, pegged by the Association of American Publishers at 207 percent through May, Amazon said.
So why are they reluctant, despite having mounds of cash? I put this question to a series of business leaders, all of whom were expansive on the topic yet did not want to be quoted by name, for fear of offending people in Washington.
Economic uncertainty was the primary cause of their caution. ... But in addition to economics, they kept talking about politics, about the uncertainty surrounding regulations and taxes. ,,,
One CEO told me, "Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about what's in store for us for the future." Another pointed out that between the health-care bill, financial reform and possibly cap-and-trade, his company had lawyers working day and night to figure out the implications of all these new regulations. ...
Most of the business leaders I spoke to had voted for Barack Obama. They still admire him. Those who had met him thought he was unusually smart. But all think he is, at his core, anti-business.
More important than your obligation to follow your conscience, or at least prior to it, is your obligation to form your conscience correctly. Nobody — remember this — neither Hitler, nor Lenin, nor any despot you could name, ever came forward with a proposal that read, “Now, let’s create a really oppressive and evil society.” Hitler said, “Let’s take the means necessary to restore our national pride and civic order.” And Lenin said, “Let’s take the means necessary to assure a fair distribution of the goods of the world.”
A lot of evil can be done by good people pursuing bad causes. A lot of harm can be done by people with good intentions but who do not understand basic economics, which is why the notion of unintended consequences is central to the subject.
In short, it is your responsibility, men and women of the class of 2010, not just to be zealous in the pursuit of your ideals, but to be sure that your ideals are the right ones. That is perhaps the hardest part of being a good human being: Good intentions are not enough. Being a good person begins with being a wise person. Then, when you follow your conscience, will you be headed in the right direction.
As of the end of March, the average U.S. household’s total mortgage, credit-card and other debt stood at 122% of annual disposable income, meaning it would take a bit more than 14 months to pay it all off if everyone stopped spending money on anything else. That sounds like a lot, but it’s better than it was before: At its peak in the first quarter of 2008, the debt-to-income ratio stood at 131%. Economists tend to see 100% as a reasonable level, so we’re almost a third of the way there.
In fact, people are making much more progress in shedding their debts by defaulting on mortgages and reneging on credit cards.
Since household debt hit its peak in early 2008, banks have charged off a total of about $210 billion in mortgage and consumer loans, including credit cards. If one assumes that investors suffered at least that much in losses on similar loans that banks packaged and sold as securities (a very conservative assumption), then the total — that is, the amount of debt consumers shed through defaults — comes to much more than $400 billion.
Problem is, that’s more than the concurrent decrease in household debts, which amounts to only $372 billion, according to the Federal Reserve. That means consumers, on average, aren’t paying down their debts at all. Rather, the defaulters account for the whole decline, while the rest have actually been building up more debt straight through the worst financial crisis and recession in decades.
According to a Fox News poll earlier this year, 65 per cent of Americans understand that the government gets its money from taxpayers, but 24 per cent think the government has “plenty of its own money without using taxpayer dollars.”
The professor, Gabriel Calzada Alvarez of Juan Carlos University in Madrid, produced a 41-page study last year on the European experiment of going full bore on the conservation front. He found that "the Spanish/EU-style 'green jobs' agenda now being promoted in the U.S. in fact destroys jobs."
For every green job created by the Spanish government, Alvarez found that 2.2 jobs were destroyed elsewhere in the economy because resources were directed politically and not rationally, as in a market economy.
Alvarez's findings, of course, were rejected by the environmental left, which tried to smear him as a stooge of the oil industry.
But inconveniently for the eco-conscious, his results have been backed up by Carlo Stagnaro and Luciano Lavecchia, a couple of researchers from the Italian think tank Istituto Bruno Leoni.
The president of the United States, Barack Obama, doesn’t seem to have chosen the right model to copy for his “green economy,” Spain. After the government of José Luís Rodríguez Zapatero demonized a study of different experts about the fatal economic consequences of renewable energies, an internal document from the Spanish cabinet that it is even more negative has just been leaked.
The numbers in the long run are even scarier. The government itself says that the alternative energies sector will receive 126 billion euros in the next 25 years. Just an example: The owners of solar plants make 12 times more than what they pay for the energy coming from fossil fuel combustion. The majority are subsidies charged to the consumer.
The conclusion is that with the economy at the point of bankruptcy, it is not possible to keep injecting money in such a costly sector. And the government seems to realize this now.
The reaction so far to government efforts to cut spending has been pessimism and anger, with an understanding that the current system is unsustainable.
Changes have now become urgent. Europe’s population is aging quickly as birthrates decline. Unemployment has risen as traditional industries have shifted to Asia. And the region lacks competitiveness in world markets.
According to the European Commission, by 2050 the percentage of Europeans older than 65 will nearly double. In the 1950s there were seven workers for every retiree in advanced economies. By 2050, the ratio in the European Union will drop to 1.3 to 1.
“The easy days are over for countries like Greece, Portugal and Spain, but for us, too,” said Laurent Cohen-Tanugi, a French lawyer who did a study of Europe in the global economy for the French government. “A lot of Europeans would not like the issue cast in these terms, but that is the storm we’re facing. We can no longer afford the old social model, and there is a real need for structural reform.”
Jean-Claude Meunier is 68, a retired French Navy official and headhunter, who plays bridge to “train my memory and avoid Alzheimer’s.” His main worry is pension. “For years, our political leaders acted with very little courage,” he said. “Pensions represent the failure of the leaders and the failure of the system.”
In Athens, Mr. Iordanidis, the graduate who makes 800 euros a month in a bookstore, said he saw one possible upside. “It could be a chance to overhaul the whole rancid system,” he said, “and create a state that actually works.”
This is the perverse logic of meritocracy. Once a system grows sufficiently complex, it doesn’t matter how badly our best and brightest foul things up. Every crisis increases their authority, because they seem to be the only ones who understand the system well enough to fix it.
But their fixes tend to make the system even more complex and centralized, and more vulnerable to the next national-security surprise, the next natural disaster, the next economic crisis. Which is why, despite all the populist backlash and all the promises from Washington, this isn’t the end of the “too big to fail” era. It’s the beginning.
Republicans say Obama's policies have failed to dent unemployment, a political sore spot for the president that has helped drag down his approval rating to 50 percent or lower.Why did the reporter throw in the sentence that I have highlighted? Why not put in this sentence: "However, many independent economists have said that the measure did little or nothing to fight the recession"? Economists are divided on the effect of the so-called stimulus package, with some believing that it helped and others believing that it did nothing or even made the recession worse. The only information this sentence contains is that the reporter believes the president and the Democrats are the good guys in this dispute and the Republicans are the bad guys.
Obama's $787 billion approved last year by the Democratic-controlled Congress was largely rejected by Republicans. However, many independent economists have said the measures helped avert an even deeper recession.
Recalling the stimulus fight, Obama said he refused at the time to give in to "partisan posturing."
But there is another more sobering reading of the Great Depression. It is that painful and once unthinkable changes are made only under the pressure of acute crisis. One reason that central banks were so passive is that they clung to the gold standard: Relaxing credit policies too dramatically to rescue banks might lead to a loss of gold; people would demand metal to replace paper money. Gold was abandoned in various countries only after it seemed untenable. Similarly, the post-World War I debt problem wasn't "solved" until repayment was impossible. As for Britain's place as global leader, the United States assumed that role only in World War II.
Against that backdrop, today's unresolved problems -- over the welfare state, leadership in the global economy -- become more ominous. They suggest that major adjustments won't be made until they're compelled by some sort of crisis. This possibility defines the present economic drama. Will the recovery encourage conscious changes? Or is recovery providing a false sense of security? The stakes are, of course, enormous, because -- as everyone knows -- the economic suffering of the Great Depression transformed many countries' politics for the worse and led to World War II.
Smith notes that some of the Post's editors are still clueless:
Some at the paper took Weigel for a true conservative counter-balance to Klein’s wonky, but fairly reliable, liberalism, two people familiar with his hiring said. Merida, in a web chat last month, was asked, “Will you (or Chris Cillizza) be adding more conservative/Republican voices to better balance what is now your predominately liberal/Democratic leaning coverage?”
And some in the media wonder why they are losing audience and credibilty.He responded that “we recently have added to our staff the well-regarded Dave Weigel, who writes the new ‘Right Now’ blog,” before mentioning conservative columnists Kathleen Parker and Charles Krauthammer.
The Greeks are a highly cultured people; the most popular slogan at the rallies was “The Croesuses should pay.” Croesus was, of course, the extremely wealthy king of Lydia whose story appears in Herodotus. The point of the protesters is that the rich should pay the costs of the economic crisis not the ‘blameless’ ordinary people whose only sin is to have voted for generations of demagogic politicians who promised to give them the moon and pay for it with other people’s money.Read the whole thing.
Greece is one of those countries like Argentina where conspiracy theories are widely seen as important intellectual breakthroughs. As in Egypt and Russia, in Greece only a fool believes anything that authorities say; it must all be deconstructed to reveal the plots within.
In many parts of the world it is easy to spot a vicious cycle at work. Because a country or a culture missed the visit of either or both of the two modernization good fairies (geography and culture) it starts out handicapped in the race to master capitalism and control their own destiny. As a result, they fall behind, and lose power and control to other, faster rivals. Capitalism becomes ever less popular, ever more associated in the public mind with a world system felt to be wrong and unfair. Those feelings of alienation make it steadily harder for the country to adopt and follow the policies that could reverse the cycle and bring it success. And so it goes.
Here’s what the TP itself really fears, in an inchoate way that for most of its members doesn’t rise to the level of clear understanding, but is still intuitively very powerful: the US is embracing central planning as a governing theory, as fast as our legislative processes will allow.
Central planning has a long record of failure, but Americans have always believed that we know how to succeed where others can’t. That leads to the hubris of people like Barack Obama, who says “YES WE CAN!”Socialism starts with the goal of equality, but once implemented it leads inevitably to rigid hierarchy, a structure not unlike the class system that free markets overthrow whenever they are allowed to function.
Central planning has two primary flaws, when compared with economic freedom: it misallocates resources, and it magnifies the impact of corruption.
Hosking first became fascinated with Russian culture during the time of Khrushchev; he is especially interested in why socialism was ultimately unsuccessful in Russia.I suppose the answer that socialism is a very poor economic system measured even by its own goals never occurred to them.
This is what decadence looks like: a frantic coarseness that “bravely” trashes its own values and traditions, and then knuckles under swiftly to totalitarianism and brute force.
Happily, today’s would-be totalitarians are probably too marginal to take full advantage. This isn’t Weimar Germany, and Islam’s radical fringe is still a fringe, rather than an existential enemy.
For that, we should be grateful. Because if a violent fringe is capable of inspiring so much cowardice and self-censorship, it suggests that there’s enough rot in our institutions that a stronger foe might be able to bring them crashing down.The chattering class loves the meme of right-wing violence but takes no precaustions against it. The same people never mention Islamic violence yet its threat causes them to self censure. Actions speak louder than words.
Norwegians are also astonishingly quick to admit that oil income does not reach their country's ordinary citizens. A young man I met defended its system by arguing that Norway has collectivized want. "Since nobody was that rich, nobody complains that our system produces equality of poverty," he told me, as we traveled in a rundown railroad car from Oslo to the rural town of Hamar. "But sometimes we ask ourselves why our infrastructure, including the transportation system, is so badly neglected." I did not have the heart to lecture him on the classic free market critique of socialism, proof for which he had just provided.....A Bosnian Muslim I met in Oslo enthused about his new homeland, where he had lived for 18 years, by equating it with Communist Yugoslavia, for which many Bosnians are nostalgic. "We were happy when we first came here because people welcomed us and the mountains and snow reminded us of home. But then we realized it offered us a better version of Tito's socialism--and not a very different one. We have jobs for life, free health care, and guaranteed housing, without the secret police or other political restrictions. For a Bosnian, Norway seems like heaven, although a bit colder and darker in the winter. When we tell our relatives and friends back in Sarajevo, they don't believe it."
"Many observers have made the point that environmentalism is eerily close to a religious belief system. Consider some of the ways in which environmental behaviors echo religious behaviors and thus provide meaningful rituals for Greens...."The author, Emory University economics professor Paul H. Rubin, goes on to mention a Holy Day (Earth Day), self-sacrificing rituals, belief systems not based on evidence, sacred structures, and evangelization.
But [tea partiers] recognize, correctly, that the Obama Democrats are trying to permanently enlarge government and increase citizens' dependence on it.
Seeing our political divisions as a battle between the culture of dependence and the culture of independence helps to make sense of the divisions seen in the 2008 election.
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.
Next, suppose that there is a bubble in housing, and when the bubble pops, many people want to put less income into expanding the housing stock and more income into investing in venture capital. This shift disrupts the economy and requires a major recalculation.There would have been this effect in the recession immediately after WWII. It is an intriguing theory with an Austrian flavor.
The economy needs to reallocate labor away from housing and related industries and into other industries. This means that the composition of the work force has to change, which takes a lot of time. Meanwhile, unemployment rises, which causes further disruption (there are multiplier effects).
While the broadcast networks seldom devolved into the juvenile name-calling and open hostility evident at the liberal cable news networks, their coverage of the Tea Party’s first year reflected a similar mindset of elitist condescension and dismissiveness. Given how the networks have provided fawning coverage and helpful publicity to far-less consequential liberal protest movements, their negative treatment of the Tea Party is a glaring example of a media double standard. Rather than objectively document the rise and impact of this important grassroots movement, the “news” networks instead chose to first ignore, and then deplore, the citizen army mobilizing against the unpopular policies of a liberal President and Congress.No news reporting can be truly objective. Any reporter, journalist, or historian must have some understanding of how the world works, and that understanding will determine the topics that are considered newsworthy and the way in which they are reported. What is clear to anyone who is not a partisan hack is that most of the mainstream media views the world from a secular, leftist perspective. There is nothing inherently wrong with that, but those in the media who deny that they have a bias and claim that they are objective reveal either ignorance or deceit. Which is worse?
Four huge shadows hang over this claustrophobic election, about which the three main parties will be trying to say as little as possible. The first, obviously, as part of the catastrophic legacy of 13 years of Labour misrule, is the barely imaginable scale of the deficit in public spending.Yet there are many American's who aspire to make the U.S. more like Britain.
The second shadow over this election is the unprecedented damage done to our politics by the expenses scandal, which has degraded the standing of Parliament to its lowest point in history.
A third, closely related shadow which the political class has been only too keen to hide away has been the still barely understood extent to which it has handed over the running of our country and the making of our laws to that vast and mysterious new system of government centred on Brussels and Strasbourg.
A final huge shadow which will barely be discussed at this election, because the main parties are all but unanimous on it, is the way our politics has become permeated by everything which can be related to global warming, from soaring taxes to the propaganda dished out in our schools, from the wishful thinking that we can spend £100 billion on building thousands more useless wind turbines, to the disastrous distortion of our national energy policy by the "green" obsessions of both the EU and our own political class, which threaten within a few years to turn Britain's lights out.
What I do hold President Obama responsible for is that he took office when it was clear that our debt and deficit had reached crisis proportions. While that situation wasn’t the case when he decided to run for the presidency, it was the situation when he assumed the presidency. And rather than rethink the core purpose of his presidency, he decided to pursue his agenda in a state of denial, as if the financial collapse that began in September 2008 never happened, as if our ominous new fiscal reality had never occurred.A 2010 remake of IOUSA would, if honest, have to reach conclusions similar to Wehner's. George Bush was as fiscally irresponsible as any president the U.S. has ever had, but compared to Barack Obama, he looks rather frugal.
At the moment when history demanded one thing of Mr. Obama, he did another.
I have little doubt that Obama, having helped to engineer this fiscal calamity, will, later in his term, try to portray himself as a model of fiscal rectitude and Republicans as the party unconcerned with the mind-bending levels of deficit and debt he’s saddled us with. I am skeptical this trick will work. Family members are surely happy if a gambling addict gives up habit, but they aren’t about to be lectured on financial responsibility by a person whose gambling ruined the family finances.
The majority of the Obama presidency is still before us. Nevertheless, it’s not too early to say that on this vital front, Barack Obama has been, and will eventually be judged to be, a significant failure. He not only missed history’s calling, he mocked it. He placed his own statist ambitions above the needs of the nation he was elected to serve. Soon enough, and perhaps on a scale he cannot now imagine, Obama and his party will be held accountable for having done so.
Imagine a drug so powerful it can destroy a family simply by distorting a man’s perception of his wife. Picture an addiction so lethal it has the potential to render an entire generation incapable of forming lasting marriages and so widespread that it produces more annual revenue — $97 billion worldwide in 2006 — than all of the leading technology companies combined. Consider a narcotic so insidious that it evades serious scientific study and legislative action for decades, thriving instead under the ever-expanding banner of the First Amendment.Pornography deserves a second look from economics. The libertarians have tended to treat it as a private matter, and argue that there is no disputing tastes. However, as a compulsion or addition it would be interesting from the point of view of behavioral economics. And if we recognize that it has externalities, mainstream public finance has a lot to say about it. I have been wondering if the enthusiasm many economists have for the global warming scare is not in large part due to the fact that they see it as an externality problem, and economists know how to fix externality problems.
Mumbai – With 22 pen strokes, President Obama signed into existence not just a historic healthcare reform law but also monumental piles of paperwork: New member registration forms. More claims. Ever-expanding databases. And on top of that, pressure to cut costs.
The bulge in administrative work may look like a nightmare to American insurance firms and government employees. But to outsourcing executives here in India, it’s heaven-sent. A number of Indian companies are already anticipating an increase in workload thanks to Obama's healthcare law.
What’s happening in the developed world today isn’t so very hard to understand: The 20th-century Bismarckian welfare state has run out of people to stick it to. In America, the feckless, insatiable boobs in Washington, Sacramento, Albany, and elsewhere are screwing over our kids and grandkids. In Europe, they’ve reached the next stage in social-democratic evolution: There are no kids or grandkids to screw over.
So you can’t borrow against the future because, in the most basic sense, you don’t have one. Greeks in the public sector retire at 58, which sounds great. But, when ten grandparents have four grandchildren, who pays for you to spend the last third of your adult life loafing around?
We hard-hearted small-government guys are often damned as selfish types who care nothing for the general welfare. But, as the Greek protests make plain, nothing makes an individual more selfish than the socially equitable communitarianism of big government: Once a chap’s enjoying the fruits of government health care, government-paid vacation, government-funded early retirement, and all the rest, he couldn’t give a hoot about the general societal interest; he’s got his, and to hell with everyone else. People’s sense of entitlement endures long after the entitlement has ceased to make sense.
The problem is there are never enough of “the rich” to fund the entitlement state, because in the end it disincentivizes everything from wealth creation to self-reliance to the basic survival instinct, as represented by the fertility rate.
What's happening in Greece speaks to two larger issues affecting hundreds of millions of people everywhere: the future of the welfare state and the fate of Europe's single currency -- the euro.
The threat to the euro bloc ultimately stems from an overcommitted welfare state. Greece's situation is so difficult because a low birth rate and rapidly graying population automatically increase old-age assistance even as the government tries to cut its spending. At issue is the viability of its present welfare state.
Almost every advanced country -- the United States, Britain, Germany, Italy, France, Japan, Belgium and others -- faces some combination of huge budget deficits, high debts, aging populations and political paralysis. It's an unstable mix. Present deficits may aid economic recovery, but the persistence of those deficits threatens long-term prosperity. The same unpleasant choices confronting Greece await most wealthy nations, even if they pretend otherwise.