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Economics & the Economy Archive

Wednesday

19

October 2011

0

COMMENTS

One of Those Stories You Can’t Make Up

Written by , Posted in Economics & the Economy

It’s hard to express how many levels this story hits on:

Occupy Wall Street protesters said yesterday that packs of brazen crooks within their ranks have been robbing their fellow demonstrators blind, making off with pricey cameras, phones and laptops — and even a hefty bundle of donated cash and food.

“Stealing is our biggest problem at the moment,” said Nan Terrie, 18, a kitchen and legal-team volunteer from Fort Lauderdale.

Eighteen year-old legal volunteers are always comforting.

“I had my Mac stolen — that was like $5,500. Every night, something else is gone. Last night, our entire [kitchen] budget for the day was stolen, so the first thing I had to do was . . . get the message out to our supporters that we needed food!”

A $5,500 Mac?!? What idiot would bring a $5,500 computer to a freaking protest?

Crafty cat burglars sneaked into the makeshift kitchen at Zuccotti Park overnight and swiped as much as $2,500 in donated greenbacks from right under the noses of volunteers who’d fallen asleep after a long day whipping up meals for the hundreds of hungry protesters, the volunteers said.

“The worst thing is there’s people sleeping in the kitchen when they come, and they don’t even know about it! There are some really smart and sneaky thieves here,” Terrie said.

Security volunteer Harry Wyman, 22, of Brooklyn was furious about the thievery — and vowed to get tough with the predatory perps.

“I’m not getting paid, but I’m not gonna stand for it. Why people got to come here and do stupid stuff? All it does is make people not wanna come here anymore,” Wyman fumed.

Wow, just wow. It’s too bad Wyman can’t see that he, the OWS crowd, and high-tax loving politicians are the bigger thieves, making businesses “not wanna come” to the US economy anymore.

Friday

14

October 2011

0

COMMENTS

Thursday

6

October 2011

1

COMMENTS

Reid Goes Nuclear On Obama's Jobs Bill

Written by , Posted in Economics & the Economy

Reid launches the nukes at Senate Republicans:

In a shocking development Thursday evening, Senate Majority Leader Harry Reid (D-Nev.) triggered a rarely used procedural option informally called the “nuclear option” to change the Senate rules.

Reid and 50 members of his caucus voted to change Senate rules unilaterally to prevent Republicans from forcing votes on uncomfortable amendments…

And what were these uncomfortable amendments, exactly? Oh, it was the jobs bill Obama has been petulantly demanding be passed right away:

McConnell had threatened … to force a vote on the original version of President Obama’s jobs package, which many Democrats don’t like because it would limit tax deductions for families earning over $250,000.

When will Obama declare, “pass this jobs bill, Mr. Reid”?

Sunday

25

September 2011

0

COMMENTS

Friday

2

September 2011

1

COMMENTS

Years Later, Seized Land Used for Debris Dump

Written by , Posted in Big Government, Economics & the Economy, The Courts, Criminal Justice & Tort

In 2005, Kelo v. City of New London made eminent domain infamous. The widely reviled Supreme Court ruling gave the go ahead for the city of New London to use eminent domain for taking private property in order that it be given to a private company for “economic development.”

The public response was one of outrage. Facing the potential wrath of voters,  politicians across the country moved to add new protections against such abusive seizures. But that wasn’t enough to save the homes of the folks in New London, whose property never would be developed. Pfizer, the intended beneficiary of the land theft, walked away years ago from their development plans.

Now, to add new insult to injury, the vacant lot is a dump. Literally.

Following hurricane Irene, the city designated the site as a place to dump storm debris, and citizens can be seen doing just that in this video on the local paper’s website.

Doesn’t that make you feel all warm inside? The Supreme Court reassured us in Kelo that the government orchestrated theft “would be executed pursuant to a “carefully considered” development plan.” What they forgot to mention is that careful consideration from politicians is worth about as much as the city’s new debris dump, which is to say: diddly squat.

The fact of the matter is that the development of the property was already being “carefully considered” by the folks that owned it, as is the case for all privately held property, and in their careful consideration they wanted to keep living on it. The lesson of Kelo is not merely on the illusory nature of our property rights. It’s also about the abject failure that is central planning, and the inability of political forces to better plan economic activity than the private sector.

Tuesday

30

August 2011

0

COMMENTS

Disaster Keynesianism Follows in Irene’s Wake

Written by , Posted in Economics & the Economy

Disaster Keynesianism is the moniker I’ve given to the belief that destruction from natural disaster promotes prosperity. It is the logical extension of standard Keynesianism, which holds that any government spending is a boost to growth, and the various voodoo “multipliers” they use to justify their faith. With Hurricane Irene now behind us, it’s no surprise to see the disaster Keynesians popping up in its wake to inform us of all the economy wonders the storm has provided.

One such example comes from Peter Morici, professor of Keynesian Voodoo at the Smith School of Business, University of Maryland. Prof. Morici claims that, “when government authorities facilitate rebuilding quickly and effectively, the process of economic renewal can leave communities better off than before.” In fairness, this may be true if taken as narrowly as possible. Morici points to the replacement of old and dated capital stock with newer facilities. This could very well happen. And because the communities do not typically bear the cost of rebuilding on their own, the individual community may well come out ahead in the end. But there’s no such thing as a free reconstruction. The rest of us who are forced to pay for this rebuilding will be made decidedly poorer by it.

The end result is a net negative on the economy as a whole. Useful resources have been destroyed, and yet more resources, which otherwise could have been used elsewhere, have been spent to replace them. The truth of this statement can be verified with a simple thought experiment. If disasters are indeed good for net economic growth, why wait for them to happen naturally? Perhaps Professor Morici will show that he’s willing to practice what he preaches and volunteer his own property for a bit of destructive economic renewal.

Friday

12

August 2011

0

COMMENTS

Populist Tax Grabs Have Consequences

Written by , Posted in Economics & the Economy, Taxes

Walter Williams provides a much needed history lesson:

President Obama has called for a luxury tax on corporate jets as a means to generate revenue to fight federal deficits. The president’s economic advisers ought to be fired for not telling him that doing so is unwise and counterproductive.

…Let’s look at what happened when one of Obama’s predecessors, George H.W. Bush, signed the Omnibus Budget Reconciliation Act of 1990 and broke his “read my lips” vow not to agree to new taxes.

When Congress imposed a 10 percent luxury tax on yachts, private airplanes and expensive automobiles, Sen. Ted Kennedy, D-Mass., and then-Senate Majority Leader George Mitchell, D-Maine, crowed publicly about how the rich would finally be paying their fair share of taxes.

…Within eight months after the change in the law took effect, Viking Yachts, the largest U.S. yacht manufacturer, laid off 1,140 of its 1,400 employees and closed one of its two manufacturing plants.

Before it was all over, Viking Yachts was down to 68 employees. In the first year, one-third of U.S. yacht-building companies stopped production, and according to a report by the congressional Joint Economic Committee, the industry lost 7,600 jobs.

When it was over, 25,000 workers had lost their jobs building yachts, and 75,000 more jobs were lost in companies that supplied yacht parts and material.

…The U.S., which had been a net exporter of yachts, became a net importer as U.S. companies closed. Jobs shifted to companies in Europe and the Bahamas. The U.S. Treasury collected zero revenue from the sales driven overseas.

Incentives matter. People respond to them, and changing incentives will change behavior. Matt Damon thinks this is simplistic MBA thinking, but it’s actually incredibly complex. Understanding human behavior is never simple. What’s simple is pretending that nothing needs to be understood at all, and that legislation can be passed in a vacuum without impacting any factor other than its particular target (typically: tax revenues).

Obama is guilty of this simplistic thinking, and the current state of our economy is a direct result of that deficiency.

Saturday

6

August 2011

0

COMMENTS

Bloomberg’s Lazy Initiative to Help Minorities

Written by , Posted in Economics & the Economy, Education

Chronic poverty, broken families, unemployment, low graduation rates, and high crime rates plague minority groups, particularly in urban areas. These problems are certainly not unique to minorities, but they are particularly acute enough to have drawn special attention from the political class. But worry not, as some rich do-gooders have come to save the day! They’re going to throw money at the problems:

New York mayor Michael Bloomberg Thursday unveiled a $127.5 million campaign to help black and Hispanic youths who suffer from staggeringly high unemployment, crime and poverty rates.

The Young Men’s Initiative aims to bring in policy reforms to “connect young men to educational, employment and mentoring opportunities across more than a dozen agencies,” a statement from New York’s City Hall said.

The three-year program will be funded jointly by private and public dollars.

Billionaire George Soros’ Open Society Foundation pledged $30 million, while the Bloomberg Philanthropies also donated $30 million with the remaining $67.5 million to come from city funds.

…According to a recent report commissioned by the city, the poverty rate among young blacks and Latino men ages 18-14 in New York City’s five boroughs is 50 percent higher than among their white and Asian peers.

Unemployment rates among the group were 60 percent higher and more than 90 percent of young murder victims and perpetrators are black and Latino, it said.

…Specific initiatives within the program include $24 million that will be invested over three years to focus on college and career readiness among minorities.

There will also be initiatives to restructure in-jail services for inmates to prepare them for release, and more than $9 million will on expanding an internship program to help training for in-demand positions such as paramedics.

“This is a crisis that demands a crisis response,” said New York Deputy Mayor Linda Gibbs. “Expressly naming the problem of disparities and aggressively fighting barriers is how we are going to begin to achieve change.”

The benefits of this effort will be marginal, at best. They may well help some folks, but it sounds like the last thing they are likely to do is actually address the “barriers” at issue here. Those barriers are, after all, primarily of government construction.

Want to help improve the high minority youth unemployment rate? Get rid of minimum wage laws that price low-skilled labor out of the market, denying young people of all colors, but particularly those of poorer, less educated backgrounds, from learning the skills and work habits they need to advance.

Want to improve education among minorities? End the government school monopoly which traps the poor in failing schools, penalizing them compared to the wealthy who can afford to escape failing government schools for private alternatives.

These are things that can be done to actually help people. But they’re politically difficult and require real leadership. It’s easier for those who really just want publicity to throw some money at the problem. It’s almost like they’re more concerned about looking like they’re solving problems than actually solving them.

Tuesday

19

July 2011

0

COMMENTS

EPA Plots New Economic Sabotage Strategy

Written by , Posted in Economics & the Economy

Facing resistance over cap-and-trade and other initiatives, the EPA is opening up a new front in its war on economic prosperity:

The EPA wants to cut the national ambient air-quality standard to between 60 and 70 parts per billion, which would push thousands of communities over the current limit of 75 ppb. That, in turn, would make it more difficult to attract new business.

“Is this really another uncertainty you want to throw at the business community right now?” asked Ross Eisenberg, the U.S. Chamber of Commerce’s environment and energy counsel. “It just doesn’t make much sense.”

…Now, Mr. Eisenberg said, he is hearing the standard will be set around 65 ppb. “Anything in that range would be too low,” he said. It would even force respected national parks like Yellowstone and the Grand Canyon out of compliance.

Communities that fail to drop within the limit will be hit with fines and forced to place restrictions on businesses. One of the biggest restrictions will be a rule that they have to tear down one or more buildings before they can build a new one.

“So you wind up scaling down,” Mr. Eisenberg said. “You’re having less business at that point. You’re taking more away than you’re adding.”

This is just Keynesian make-work by another name. Destroying buildings before you can make new ones, digging ditches for no purpose, it’s all the same: a waste of resources. But at least we’ll have plenty of “green jobs” destroying the prosperity of yesteryear and ushering in our future of sustainable, eco-friendly poverty.

Friday

8

July 2011

0

COMMENTS

How Unexpected

Written by , Posted in Economics & the Economy, Media Bias

The media was caught off guard once again by June’s dismal jobs report:

U.S. Payrolls Grow at Slowest Pace in 9 Months

American employers added jobs at the slowest pace in nine months in June and the unemployment rate unexpectedly climbed to 9.2 percent…

Jobs Report Dashes Recovery Optimism

The unemployment rate jumped unexpectedly higher in June as U.S. job growth was virtually non-existent.

June jobs report: Hiring slows, unemployment rises

The job market hit a major roadblock last month, as hiring slowed to a crawl and the unemployment rate unexpectedly rose.

Treasury 5-Year Note Yields Fall Most in 14 Months as Payroll Gains Shrink

Treasuries gained, pushing five-year yields down the most in more than a year, after the economy added the fewest jobs in nine months and the unemployment rate unexpectedly rose, fueling bets the recovery is losing steam.

Economic outlook worsens as U.S. adds only 18,000 jobs in June

Job growth came nearly to a halt in June, the federal government said Friday with surprisingly grim new data that challenge expectations that the economy is poised to bounce back from its spring lull.

Treasury Prices Surge On Weak Jobs Report, Obama Comments

As a surprisingly weak jobs report sent shockwaves through the financial markets Friday, investors scrambled into the safe harbor of Treasury bonds.

On and on it goes. Question: When do these clowns start expecting the “unexpected”?