Another fine, and timely, econ 101 video from the Center for Freedom and Prosperity. When future historians write the history of the Obama administration, and what a sad farce that tale will consist of, I think they will stand aghast at all the borrowed money poured out by the Federal government with virtually zero positive impact on the economy. In regard to Keynsian economics, the Obama administration is proof that one of Karl Marx’s maxims has proven to be a largely accurate observation on human affairs: Hegel remarks somewhere that all facts and personages of great importance in world history occur, as it were, twice. He forgot to add: the first time as tragedy, the second as farce. Continue reading
There are few things sadder than a one trick pony whose trick fails to work. Obama, with a faith whose fervency cannot be doubted, believes with all his soul that vast government spending is the mechanism to lift the country out of this never ending bad slump. That his policies have failed to do anything other than to increase our massive public debt, sways him not at all. For a true ideologue, and that is what Obama clearly is, a collision between reality and beliefs merely means that reality is wrong since the beliefs are beyond question. Thus in economic policy this administration is one endless Groundhog Day where the nation is stuck in a loop of high unemployment, minimal economic growth and ever expanding public debt. Continue reading
Current fiscal and monetary policies in the United States and Europe risk increasing government control over national economies, resulting in weakened political strength throughout “the whole of the western world,” the Vatican’s top banking expert said.
Writing in the Jan. 14 edition of the Vatican newspaper, L’Osservatore Romano, Tedeschi warned of the growing influence of “Keynesian” economic theory on both sides of the Atlantic.
Governments on both sides of the Atlantic, he said, are committed to Keynes’ policy of increasing public debt to sustain levels of economic production, consumption, and employment.
He said artificially low interest rates are another key to the strategy of increasing spending and discouraging saving. With no incentive to keep money in the bank, those who would have otherwise been savers are pushed to spend.
“Zero interest rates factually equal a de facto transfer of wealth from he who was a virtuous saver (although not for Keynes) to he who has become virtuously (for Keynes) indebted,” he said. “Practically, it’s about a hidden tax on poor savers, a tax transferred to the wealthy, (that is), over-indebted states, business people and bankers.
For some reason, I found myself reading through Paul Krugman’s recent NY Times material. Perhaps it was a desire for a little mental vaunting, what with the direction the elections seem to be taking, and if so I should have come away quite satisfied as Mr. Krugman is in full Chicken Little mode. A GOP takeover of congress will be a disaster, and we should all be very afraid. Stupid people are allowing their emotions to run away with them and will destroy the world economy through getting all moralistic about debt. And of course, the reason why the entire world doesn’t see things Krugman’s way is because macroeconomics is too hard for them to understand.
Well, I’m certainly prepared to admit that Krugman’s expertise in macroeconomics is greater than my own — and I’ll even stretch and say that my understanding probably goes farther than that of the average bear. Continue reading
I found this piece from the English-language edition of Der Spiegel by University of Hamburg economics professor Thomas Straughaar very interest, in part because it reads very much as written by someone who is looking at American history and culture from the outside, yet trying to understand it for what it is. A key passage from the second page:
This raises a crucial question: Is the US economy perhaps suffering less from an economic downturn and more from a serious structural problem? It seems plausible that the American economy has lost its belief in American principles. People no longer have confidence in the self-healing forces of the private sector, and the reliance on self-help and self-regulation to solve problems no longer exists.
The opposite strategy, one that seeks to treat the American patient with more government, is risky — because it does not fit in with America’s image of itself.