Archive for the 'Economics 101' Category
Tuesday, January 18th, 2011
Black Reagan’s Third Year
He Warned Us...
While scamming the electorate in 2008, Zerobama did admit he was into Reagan. Careful to suggest he was also into FDR, he did admit it.
Certainly, no doubt remains which was the substance and which the window dressing.
Fresh off appointing a high-ranking career bank executive his new Chief of Staff, our Entrepreneur-in-Chief has long since buried all talk of FDR under the accumulating mountain of his Reaganite assaults on the public/give-aways to the rich.
The latest, delivered with yet another insistence that “Small firms drive growth and create most new jobs in this country,” that, in other words, government will continue to do nothing to create jobs directly? A truly moribund mega-howler, delivered, appropriately enough, on the opinion page of The Wall Street Journal.
The actual essay, chock full of familiar, obsequious Reaganite fictions surrrounding the core thesis that “vibrant entrepreneurialism is the key to our continued global leadership and the success of our people,” is just too awful to reprint here. Read it on you own, if you must. But don’t bother. It’s vintage Reagan: Hoary, moldy, petulant, wishful falsity.
Suffice it instead to say, this summary from The New York Times is just about right:
President Obama, intensifying his courtship of the business community, announced Tuesday that he is issuing an executive order that aims to free companies of unnecessary regulatory burdens and promote economic growth.
In an opinion article in The Wall Street Journal, Mr. Obama said he is ordering a government-wide review of the rules that govern business, in an effort to remove “outdated regulations that stifle job creation and make our economy less competitive.’’ He said his administration is committed to seeking the ‘’proper balance’’ between freedom of commerce and regulations necessary to protect the public against threats to health and safety.
They always talk about “balance,” of course, when they are opening the henhouse door even wider for the foxes. We have scared and defenseless poultry and hungry, impatience canines wanting to expand their dining habits. The foxes aren’t asking to take the door off completely. “Balance,” see?
In actual history, of course, before giving them away to capitalists, government sponsors or invents most of the core technologies (assembly line, airplanes, computers, various types of electronics), and government regulation has always been not just a primary form of protection for the public, but also often a core benefit to business interests. Never in human history has de-regulation revived a depressed capitalist economy. Indeed, it can’t, because depressions are demand-side, not supply-side, problems. Further indulging business owners when there is already too much capital at the top does nothing (less than nothing, really) to put money in the pockets of those truly in need, the ones who would spend it if they had it on basic, economy-boosting products.
All that, of course, is not going to stop an utterly unchecked and decrepit and self-deluded ruling class of rentiers and their lapdog politicians from making the same old claim. Power concedes nothing without a demand. Hell, it doesn’t even admit it has a problem.
It would be funny if it weren’t so deadly serious.
Saturday, January 15th, 2011
Yunus the Loon
In 1983, I founded Grameen Bank to provide small loans that people, especially poor women, could use to bring themselves out of poverty. At that time, I never imagined that one day microcredit would give rise to its own breed of loan sharks.
So said Nobel Peace Prize winner Muhammad Yunus in yesterday’s edition of The New York Times.
Like Major Strasser, he is shocked to discover that this is exactly what has happened. Capitalism, it seems, is not charity, despite the dishonest (or negligently naive) assurances of deluded creeps like Yunus and the Nobel clown committee.
Monday, January 10th, 2011
The Fruits of Private Taxation
Structurally and historically, big business marketing is a substitute for unrestrained, Adam-Smithian price competition, which capitalists have always hated and moved to suppress. By co-respectively avoiding price war and competing instead via marketing, big businesses essentially gain a power their own dogma denies they seek or have: the power to levy private taxes.
And big business marketing is precisely this: an activity funded by a tax levied by corporate shareholders upon those who comprise their targets, the sea of prospective buyers. The funds expended on big business marketing come from the marked-up prices of purchased corporate products. As I explained in The Consumer Trap book, in the aggregate, big business marketing is an activity that rivals total public government spending in scale.
The wastefulness of the spending this private tax embodies dwarfs most government programs.
Take the case of cellular telephone marketing in the USA, a topic we here at TCT have discussed before. Here you have an industry that is not only a natural monopoly (and therefore inherently easily run by the public), but one in which the private corporations who control it provide entirely unremarkable service at the world’s highest prices.
I’ve long been fascinated by the fact that, not only does saturation-level advertising accompany and largely cause this pointless (except to shareholders, of course) economic disaster, but the advertising in question, in the guise of “humor,” almost always depicts reasons not to use or “upgrade” cellular telephones!
Consider this particular ad, currently in heavy rotation on U.S. television, from AT&T:
Not only does this scene depict unattractive and shallow people using cell phones for a patently moronic and pointless activity within a setting — a moving automobile — that makes the depicted activity deadly, but what is the proffered benefit being suggested by the ad? To be five seconds ahead of your friends in receiving trivia. And the presentation? A threat: “Don’t be left behind!”
Our grandchildren will look back in horror that such were the priorities of our society and the nature of our “rethinking the possible” in the early 21st century. Should we somehow manage to dethrone our massively decrepit and shameless corporate overclass and pass future generations a world still capable to looking back, our “entrepreneurial” masters will be compared to Nero and Caligula.
Friday, January 7th, 2011
Small Business History
Here is a table listing the U.S. unemployment rate for three different years:
| 1940 | 14.6% |
| 1942 | 4.7% |
| 1944 | 1.2% |
___
Here, meanwhile, is today’s “analysis” from William C. Dunkelberg, chief economist for the National Federation of Independent Business, as quoted in a New York Times story explaining why “at least through the rest of President [Zer]Obama’s four-year term” it is entirely unreasonable to expect current unemployment levels to drop much:
“You can’t recover quickly from a disaster like we’ve been through.”
Yes, clearly impossible.
ROFLMFAO.
Tuesday, November 23rd, 2010
And a Triplet…
If you doubted the accuracy of yesterday’s twin quotes, the second of which suggested that the overclass is enjoying a luxury boom even as the mass of the population sinks toward and through 99er status, consider this item from today’s edition of The New York Times:
The nation’s workers may be struggling, but American companies just had their best quarter ever.
American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or non-inflation-adjusted terms.
Corporate profits have been going gangbusters for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.
This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less.
Wednesday, August 11th, 2010
Dolts in High Places
Among the rules described by Herman and Chomsky is the one that says, to rise to a position of power in our market-totalitarian society, you either have to be a moron, or unfailingly pretend you are one.
Want proof? Consider the answer Christina Romer, the recently departed Chair of the President’s Council of Economic Advisers, provided to Bloomberg Business Week when it asked why unemployment is “higher than expected”:
BBW: Why do you think that is?
Romer: My guess is the main reason has to do with…the fact that [the recession] was caused by a financial crisis. Since it was such an unusual event, firms may have reacted more forcefully than was usual out of a fear of the unknown. Also, firms that couldn’t get credit may have had to lay more people off than normally.
What an absolute crock. First of all, Romer, a supposed world-class scholar on this very topic, wants you to believe that the current Great Depression III is the cause, rather than the consequence, of the widening gulf between economic production and employment.
Worse, her proffered explanation is a meaningless cloud of farts covering an exceptionally simple and powerful fact: Between 1990 and 2008, U.S. businesses tripled their computer investment/labor spending ratio. Computers are used for administration and communication, but they are also the core means of automating production processes. So, the simple fact is that capitalists are continuing to be capitalists. Their system works, for them. Over time, it employs fewer and fewer people per unit of output.
Being too stupid to track (or too well-trained to mention) this elementary process is the kind of thing that gets you the Presidency and the American Economic Association and a seat in the White House.
Romer is a Homer (Simpson).
