6. January 2012 by Publius.

From the Department of Labor (unmassaged numbers): (follow menu item 1 to see the numbers)
In December 2008 there were 135,254,000 people employed.
In December 2011 there were 132,721,000 people employed.
That means there has been a loss of 2,533,000 jobs in the last 3 years.

That much is fact. Now for some mathemagic…. U.S. population has historically grown at a rate of 1.3%/year. If that has held true for the last 3 years, then the population has grown by roughly 11,800,000 people. If you assume that the increase in uniform for all age groups, then the population between 18 and 65 then the growth of the population segment that is (theoretically) looking for a job has grown by 7,700,000 in the last three years.

Therefore the true increase in unemployment is 10,000,000!
Welcome to the obama recovery.

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19. November 2011 by Publius.

In fact, these protesters making the claim that they represent 99% of the people is about the silliest thing I’ve ever heard. 54% of Americans own stock. While 1.5% of Americans belong to the National Rifle Association, between 35% to 50% own a gun. 20% of Americans smoke tobacco. 40% of high school seniors have used marijuana.

The only point I am trying to make is that this country is not 99% anything. You have to twist divisions out of all rationality to imply that kind of unity. 99% of Americans have eaten a tomato. The difference between that (imaginary) statistic and the claim of the 99ers is that eating a tomato is a binary event. Each person  either has eaten a tomato, or has not. Group membership is clear - perhaps there is a market for t-shirt makers here. Economic level, however, is a spectrum. There is no significant difference between someone in the top 1% of income earners and those in the top 2%, or top 5%. This whole thing is just a rhetorical tool used by hate mongers to imply some sort of justified class warfare. It’s baloney.

This movement is being orchestrated online. The advocates claim this as proof of democratization (note to self: a topic for another column), it is, rather, proof of their idiocy. How do people with smart phones and computers justify themselves as downtrodden? Neither is a necessity of life, neither is a right. These people are among the world’s elite - put there by the system they condemn.

And if they want to complain about inequality, I submit that there is a greater difference between the elite and the not-s0-elite under socialism than under capitalism. And, under socialism, the stratification is far more rigid than under capitalism.

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9. August 2011 by Publius.

“Economics is the study of the use of scarce resources which have alternative uses.”—Lionel Robbins

This has nothing to do with the economic system in place. It is true under capitalism and under communism. Man has always existed with conditions of scarcity. Man will always exist with conditions of scarcity.

It is important to note the difference between scarcity and shortage. A commodity can be scarce without there being a shortage. In the United States today there is no shortage of food. Much of the country is fighting a battle with obesity instead. Yet there is a scarcity. This scarcity is localized – and that is what results in food being traded. Most people in this country do not grow enough food to feed themselves. Farmers, on the other hand, do not produce enough farm machinery to keep their farms growing. Both sides find it preferable to split the tasks of producing machinery and producing food and to engage in trade to reduce the scarcity of both commodities.

This is the basis of all economic activity.

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1. May 2010 by Publius.

For the last 3 years I have been privately predicting that gasoline is going to hit $6.00. Today I finally heard somebody on TV say $5.00/gallon this summer. That’s not the magic number. It will go to $6 - our government will see to that.

They will use a mixture of incompetence and policy to accomplish that. Why? Well, the incompetence comes naturally to them. The policy derives from a spreadsheet I ran a couple of years ago that I think they have duplicated. I wanted to buy a new car, but I needed to justify it to myself (and my chief financial officer), so… a spreadsheet showing how much money we could save by purchasing a hybrid. A problem soon surfaced - hybrids don’t make sense if gas is less than $6.

There are techno-ideologues in Washington that are pushing the green agenda and are perfectly willing to sacrifice the economic health of our country on the altar of alternative (altar-native?) energy.

So a good stock tip would be to invest in the Cariola Wheelbarrow company. When fuel costs rise to ridiculous levels - we will be forced back to 19th century technology. Frankly, I don’t know whether Cariola is publicly traded, but even if you can’t buy stock, you can get a heavy duty wheelbarrow and be ready for the Fundamental Reformation of America.

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24. April 2010 by Publius.

The president, our crook-in-chief, is trying to blame Wall Street for the financial collapse. That is a flat-out lie! The majority of the blame lies in the lap of the government. Here are some facts from the Community Reinvestment Act. It was passed  in 1977 and signed into law by Jimmy Carter. It mandates that banks lend “fairly” in all communities in which it operates. It does not, however, specify the meaning of fair. That leaves it up to bureaucrats in the Federal Reserve, FDIC, Office of the Comptroller of the Currency, and the Office of Thrift Supervision to make “fair” mean whatever they want. This in inherently inconsistant, arbitrary and unfair. So Carter is criminal #1. There are “rules” laid out in at least 22 different places in the CFR (Code of Federal Regulations). I challenge anyone to figure out what they mean - and that challenge is good for employees of the above agencies. You can’t do it - they can’t do it.

The  Financial Institutions Reform Recovery and Enforcement Act was passed in 1989, signed by George Bush (I), giving him the spot as criminal #2. This opened up the range of people able to pressure the banks into making risky loans. Now community group, i.e. Acorn, could make their own judgments of a bank’s performance and make it difficult for any bank to do business if they do not agree about the bank’s policies.

In 1992 (also Bush’s fault) the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 put the finishing touches on our doom. This allowed/forced Fannie Mae and Freddie Mac to create the derivatives that you have all heard of and to prioritize low-income loans, a.k.a. risky loans, in their investments. It was not The Greed of Wall Street, it was the corruption and cronyism of our officials that created this mess.

1994 - the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 created banks “too big to fail”. This one is on Clinton’s head, giving him our number 3 spot on the criminal hit parade.

In 1995 Clinton instituted regulatory changes that had the Federal Government micromanaging the banks. Do not blame bank executives for anything that happened after 1995 - government bureaucrats were in charge. This, by the way, is not capitalism, it is fascism - private ownership, government control.

In 1999 Senators Dodd and Schumer became made men in this government mafia with their modifications of the Federal Deposit Insurance Act. Their changes allowed banks to merge or expand into other areas of operation.

In 2005 more rule changes redifined bank size, encouraging the rash of mergers we have seen that reduced the stability of the banking system we used to have. This marks Bush (II)’s membership in the government conspiracy. 2007 regulatory changes continued to make things worse by again redifining bank size, further speeding up the mess of mergers, further reducing our financial stability.

And by 2008 the system was collapsing.

So why does Obama deserve membership in the this august group? Because he wants to make things worse. I’ve talked about these events as the result of a conspiracy. Frankly, I do not believe that such a conspiracy exists. Unfortunately the alternative explanation is that our leaders, each and every one of them, are too damn stupid to be allowed to buy coffee by themselves, let alone run our lives. I hope you will follow some of these links and learn for yourselves what a bad idea more government regulation, more government control is.

Live free.

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20. February 2010 by Publius.

There is a difference between wealth and money. Most people, not just politicians, seem to be confused about that. That’s why they think that governments can spend their way out of an economic downturn. It can’t be done. Governments may be able to create money, they never produce wealth.

There are two ways a government can get money to spend:

1. They tax their citizens. This, obviously, produces neither wealth nor money. All it does is remove money from one part of the economy to place it in a more favored part of the economy. In terms of old sayings, it’s robbing Peter to pay Paul.
2. They print money. This is where their confusion about wealth becomes important. Wealth is paper clips, wine, cars, food, lathes, salt, ships, airplanes, even ammunition. It is not money. Money is only a tool man invented to make the exchange of items of wealth more convenient. Increasing the money supply without increasing items of wealth merely increases the exchange rate between goods and money. This is the law of supply and demand. It is a natural law - not a man-made law. It cannot, it will not, be violated.

So what happens now? Because of current taxation policies some people will get richer, some will get poorer. All will lose because of the lack of predictability and fairness (”fair” will be addressed in a later post). People’s lack of trust will cause them to reduce economic exchanges and the total wealth of the system will decline.

Printing money will lead to inflation. It will likely lie somewhere between what was seen in Nigeria and what was seen in the Weimar Republic. The social consequences are going to be staggering. The collapse of wealth will be huge and our country will be starting from scratch.

One way or another.

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25. February 2009 by Publius.

The current economic crisis is the result of a loss of capital.  The causes of that loss are government mismanagement, corporate mismanagement, and personal mismanagement.  The problem now is a ridiculous focus of the government on trying to spend our way out of the mess.  Capital cannot be accumulated by spending.  It is accumulated by saving.  A failure to see that is evidence of either ignorance, stupidity, or cupidity.  Nobody has accused Obama of stupidity.  With his education, you might wrongly assume that he couldn’t be ignorant.  Please note that a belief that Obama is ignorant is not an insult - if he is ignorant, he doesn’t have to be stupid or power-hungry.

His ignorance is likely a result of listening only to Keynesian economists.  He has practically stated that this is the case when he avered that all, or almost all, economists agreed that government spending was the right way to go.  The entire Austrian School of Economics disagrees.  Obama needs to open his ears and listen.  It can’t be hard.  The Cato Institute paid for a full page newspaper ad filled with the names of prominent economists who  think that the stimulus package is exactly the wrong thing to do.

The reason that it is so very wrong is that every dollar spent on consumption is a dollar not available to improve productivity.  Consumption vs. capital. Consumption vs. capital. Consumption vs. capital.  Repeat this to yourself at least 10 more times.  It will be on the test.

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