Posts Tagged ‘Economics’

Of mice, men, and politics

August 5, 2008

A viable new political party is often the subject at hand, all, or in part at various blogs such as Stiff Right Jab, TexasFreds, and here. This would be a serious, and difficult undertaking. I worked for ballot access here in Colorado, and it was difficult to say the least. That would be just one of many problems that would have to be overcome when establishing a serious alternative to the present situation. Certainly one should look to the past to learn about the things that would lay the ground work. Below is from the Patriot Post. It is worth the read…

PATRIOT PERSPECTIVE

Demonomic deja vu

By Mark Alexander

The current “change” in economic policy, as proposed by the latest protagonist of Leftist ideology, can best be summed up in the inimitable words of that great philosopher Yogi Berra: “It’s deja vu all over again.”

Politicos come and go, but the essential philosophical divergence between conservatives and liberals remains as stark today as ever. That disparity is most evident in how conservatives and liberals have always viewed the role of government, and its policies concerning taxation, spending and regulation.

While one may correctly argue that the majority of elected Republicans do not justly honor the conservative principles set forth in the Republican Party Platform, the majority of Democrats certainly march in lockstep behind their Leftist despots, and their electoral lemmings are close behind. (As George Bernard Shaw once noted, “A government that robs Peter to pay Paul can always depend upon the support of Paul.”)

So what informs the two distinctly different visions from the Right and Left?

Essentially, conservatives, as the root word implies, strive to conserve the principles outlined in our Constitution, and our vision for America requires robust support for individual liberty, the restoration of constitutional limits on government and the judiciary, and the promotion of free enterprise, national defense and traditional Judeo-Christian values.

On the other hand, the Left one, liberals, as the root word implies, aspire to liberate the nation from its founding tenets by promoting a “Living Constitution,” as a primary tool for constricting individual liberty, expanding the power of government, regulating all manner of enterprise, gutting national defense and advocating relativism.

Conservative economic policies are founded on the ideals of liberty and freedom advocated in the historic writings of Adam Smith, Jean-Baptiste Say and John Stuart Mill, and further refined by such economists as Ludwig von Mises and Friedrich Hayek, and most recently, the late Milton Friedman. Economic liberty is embodied in the practice of free-enterprise capitalism, which functions best if largely unconstrained by government taxation and regulation.

These are the economic principles advocated by our founders.

As James Madison described it in his era: “[I]f industry and labour are left to take their own course, they will generally be directed to those objects which are the most productive, and this in a more certain and direct manner than the wisdom of the most enlightened legislature could point out.”

Madison certainly understood the threat of centralized government power, writing in Federalist No. 45, “The powers delegated by the proposed Constitution to the federal government are few and defined.” Madison noted further, “The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.”

Anti-federalist Thomas Jefferson similarly observed: “Were we directed from Washington when to sow, and when to reap, we should soon want bread. …[W]hen all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another.” He noted correctly, “The natural progress of things is for liberty to yield and government to gain ground.”

Jefferson was clear on his disdain for taxes: “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

But the Left adheres to a very different group of economic philosophers.

Barack Hussein Obama’s economic plan is nothing more than a remake of Franklin Delano Roosevelt’s class-warfare proclamation: “Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.”

In fact, Roosevelt’s “principle” was no more American than Obama’s. Not to be confused with the biblical principle in the Gospel according to Luke, “From everyone who has been given much, much will be required…” (which, ironically, some Leftist do-gooders cite as justification for socialist policies), Roosevelt was essentially paraphrasing the gospel according to Karl Marx, whose maxim declared, “From each according to his abilities, to each according to his needs.”

Jesus used parables to enlighten the heart, in this case, about our personal responsibility. Marxist methods are a bit more coercive—rejecting God and anointing the state as the supreme deity.

Soviet dictator Nikita Khrushchev said of Roosevelt’s “New Deal” paradigm shift, “We can’t expect the American people to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism.”

Perennial Socialist Party presidential candidate Norman Thomas (the grandfather, incidentally, of Newsweek Assistant Managing Editor Evan Thomas), echoed that sentiment: “The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.”

We are much closer to that day in 2008.

Obama insists we have “an economy that is out of balance, tax policies have been badly skewed, and wages and incomes have flatlined.” To resolve this he says we need a “tax policy making sure that everybody benefits, fair distribution, a restoration of balance in our tax code, money allocated fairly—we’re going to capture some of the nation’s economic growth… and reinvest it.”

Obama says that free enterprise is nothing more than “Social Darwinism, every man or woman for him or herself… tempting idea, because it doesn’t require much thought or ingenuity.”

Obamanomics is nothing more than a Marxist echo, and Obama himself a “useful idiot,” a Western apologist for socialist political and economic agendas advocating Marxist-Leninist-Maoist collectivism.

Obama’s campaign theme, like that of all useful idiots before him, is built on “The Politics of Disparity,” class warfare.

Between now and Election Day, Obama will be faking right and looking centrist. He has been invoking his version of another Yogi Berra witticism, “I didn’t really say everything I said.”

Of course, Yogi also said, “You can observe a lot just by watchin’.” In deference our great national heritage and our Founder’s legacy of liberty, one would only hope that a majority of voting Americans are sufficiently observant to see through Obama’s deception.

(To compare U.S. tax tables since the implementation of the federal income tax in 1913, see Tax History 1913-2008. The Patriot also offers a comparison between the FairTax, Income Tax and Flat Tax. For additional constitutional context, read “To secure these rights…” on The Bill of Rights and A “Living Constitution for a Dying Republic”. For additional resources, see The Patriot’s Topical Essays and Policy Papers page and our Historic Documents page.)

Economic Schools of Thought

August 3, 2008

Whiskey and Gunpowder, two things that built this nation, and a rather good blog that I just discovered.

Greg’s Note: There is plenty of complex mathematics involved in high-level economic theory. But no matter how many advanced mathematics degrees you can obtain from Cal Tech or MIT, you may never have the grasp on economics as someone who truly understands the history and theory that goes into it. Lord William Rees-Mogg explains the limitations and strengths of these two different approaches to economic understanding and how well they fare when it comes to predicting economic occurrences. Which area of thought do you trust more? Let us know by writing to greg@whiskeyandgunpowder.com.

Whiskey & Gunpowder
July 17, 2008
By Lord William Rees-Mogg
London, England, U.K.


Two Schools of Thought

There are two ways of studying economic theory. One approach is mathematical, and has been much enhanced by the computing power available to the individual economist. The other is historical and relies on the accumulated understanding of economic theory and practice.

The events of 2007 and 2008 have shown the limitations of the mathematical method. The credit crunch was not foreseen by anyone that I read, but it came as a shock to the number crunchers — it took them completely by surprise.

~~~~~~~~~~~~~Special~~~~~~~~~~~~~

The Myth of Abundant Oil

We’ve been told for years that oil would last forever. We especially hear this from the governments of many oil-producing countries.

Unfortunately, this is not the case. The many lies we’ve been told are finally being exposed, and we’re paying the price. What’s really going on here? Find out by clicking here

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It did not come as a shock to the economic historians, who happily settled down to discuss the resemblances between this credit crisis and earlier ones, going back to the South Sea Scheme in 1720 or the Wall Street Panic of 1907. The economic historians know that similar events had happened before, and had also learned, often by painful experience, that such events are quite common.

Neither group foresaw the actual events of August 2007, but the historians were quite able to put the credit crisis in a context of other crises. Even though both groups were taken by surprise, it was the mathematicians whose previous forecasts were stood on their heads.

By and large, historical economists, who follow the example of major English economists such as Maynard Keynes or W.S. Jevons, do not regard timing as any more predictable for economic shocks than for earthquakes.

One can say that there is a build up of stress in the system that will eventually have to be released. One cannot say that the release of pressure will occur next Tuesday or next August or even next century.

Some say the big earthquake will happen along the San Andreas Fault in California. It may come tomorrow; it may come before 2050; it may not happen for 500 years. We can usefully predict what and where, but we can very seldom predict when. This makes expectation difficult to quantify, though all markets are based on expectations

What we do know from economic history is that there is a cycle of debt that has to be relieved. In twentieth century history the war debts of the first war played their malign part in the European depression of the 1920s and eventually in the Great Depression of the 1930s. The Austrian School of Economics, and particularly Friedrich von Hayek, developed the Debt-Deflation theory of the business cycles. Hayek indeed foresaw the risk of a deflationary crisis as early as 1927.

~~~~~~~~~~~~~Special~~~~~~~~~~~~~

Making Money in a Floundering Market

Investing in the stock market is tricky these days. There are still good investments out there that will pay off, but the gains you can expect will be modest at best.

That’s why, in times of trouble, simply learning a new technique can double and even triple your gains. What technique is it? Click here to find out…

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Keynesian economics, as expounded in his General Theory, 1936, were criticised at the time for an inadequate appreciation of the negative aspects of excessive debt. Bankers of the Gold Standard era attached great importance to the balance sheet rather than the profit and loss account. I get the impression nowadays that people read the current account much more carefully than they do the capital account — partly because they think that off balance sheet financing has reduced the transparency of the balance sheet itself.

As a result, government balance sheets, bank balance sheets, corporate balance sheets and personal balance sheets have all deteriorated. Finance ultimately depends on the security of capital, and weak balance sheets, at any level, are exposed to risk and to problems of opportunity cost.

An old-fashioned banker would now be calling for strengthening of balance sheets at every level. But the liquidation of debt takes years to accomplish and diverts fund from current consumption. The 2007 credit crunch calls for liquidation of debt, but that is bound to have a deflationary effect.

Regards,
Lord William Rees-Mogg

Greg’s Endnote: Until we do have a liquidation of debt, we won’t be feeling the deflationary period that Rees-Mogg mentioned. We are still going through a period of inflation with commodity prices rising while the dollar loses its value quickly. Sure, we’ve all seen the news stories written about oil prices and gold prices. But did you know that there is an investment out there that’s actually better than gold? Click here to find out what it is…

Tarzan and monatary policy

August 3, 2008

stolen from

From fiat money imposed upon us all by President Nixion we have, among other things, the following assessment.

“The US DOLLAR INDEX rallied today 31 basis points to close slightly over 72 at 72.042. Yaaawn. We’ve seen this act before. Does it mean anything? Who knows? Nobody has accused the dollar of sincerity recently.

Remember the scenes from the old Tarzan movies? Walking through the jungle, all the bearers suddenly grow quiet. They cock their heads. The safari leader, clutching his rifle, asks the lead bearer, “What is it, Mbwezi?” Dimly in the distance the throb of drums grows louder. The female star creeps closer to the safari leader, grabbing his arm and scooting behind him. The drums throb louder. The bearers drop their loads.

Now if you’ve seen one Tarzan movie, you know that the Ngali, the most bloodthirsty tribe in all of Africa who specialize in dicing their victims while still alive, are about to attack. You know that unless Tarzan shows up pretty soon, the entire safari will be salsa.

That scene is where the US dollar is right now, hiding behind safari leaders Bwana Ben and Bwana Paulson, while the wild tribes of bond & currency Ngali circle in the jungle, waiting for their chance to bring down the whole safari. Can’t you hear the drums throbbing in the distance? Bad juju.”

At times I wonder if monatary policy is actually a form of anarchisim these days.

Two Schools of Thought!

July 28, 2008

There are two ways of studying economic theory. One approach is mathematical, and has been much enhanced by the computing power available to the individual economist. The other is historical and relies on the accumulated understanding of economic theory and practice.

The events of 2007 and 2008 have shown the limitations of the mathematical method. The credit crunch was not foreseen by anyone that I read, but it came as a shock to the number crunchers — it took them completely by surprise.

It did not come as a shock to the economic historians, who happily settled down to discuss the resemblances between this credit crisis and earlier ones, going back to the South Sea Scheme in 1720 or the Wall Street Panic of 1907. The economic historians know that similar events had happened before, and had also learned, often by painful experience, that such events are quite common.

Neither group foresaw the actual events of August 2007, but the historians were quite able to put the credit crisis in a context of other crises. Even though both groups were taken by surprise, it was the mathematicians whose previous forecasts were stood on their heads.

By and large, historical economists, who follow the example of major English economists such as Maynard Keynes or W.S. Jevons, do not regard timing as any more predictable for economic shocks than for earthquakes.

One can say that there is a build up of stress in the system that will eventually have to be released. One cannot say that the release of pressure will occur next Tuesday or next August or even next century.

Some say the big earthquake will happen along the San Andreas Fault in California. It may come tomorrow; it may come before 2050; it may not happen for 500 years. We can usefully predict what and where, but we can very seldom predict when. This makes expectation difficult to quantify, though all markets are based on expectations

What we do know from economic history is that there is a cycle of debt that has to be relieved. In twentieth century history the war debts of the first war played their malign part in the European depression of the 1920s and eventually in the Great Depression of the 1930s. The Austrian School of Economics, and particularly Friedrich von Hayek, developed the Debt-Deflation theory of the business cycles. Hayek indeed foresaw the risk of a deflationary crisis as early as 1927.

Keynesian economics, as expounded in his General Theory, 1936, were criticised at the time for an inadequate appreciation of the negative aspects of excessive debt. Bankers of the Gold Standard era attached great importance to the balance sheet rather than the profit and loss account. I get the impression nowadays that people read the current account much more carefully than they do the capital account — partly because they think that off balance sheet financing has reduced the transparency of the balance sheet itself.

As a result, government balance sheets, bank balance sheets, corporate balance sheets and personal balance sheets have all deteriorated. Finance ultimately depends on the security of capital, and weak balance sheets, at any level, are exposed to risk and to problems of opportunity cost.

An old-fashioned banker would now be calling for strengthening of balance sheets at every level. But the liquidation of debt takes years to accomplish and diverts fund from current consumption. The 2007 credit crunch calls for liquidation of debt, but that is bound to have a deflationary effect.

Regards,
Lord William Rees-Mogg

Economic Schools of Thought

Stolen from

Bill O’Reilly interviewed John McCain

May 15, 2008

Ever so often a contributor to one of the forums that I post at comes up with a real jewel. The following was intended in jest. However, it rings oh so true. Enjoy! 🙂

source: http://amcon.proboards99.com/index.cgi?board=trs&action=display&thread=451

Last week, Bill O’Reilly interviewed John McCain on the O’Reilly Factor. Bill O’Reilly really grilled McCain about his opposition to drilling for oil in the ANWR and McCain got visually upset with the questions. Bill O’Reilly is a professional TV host and interviewer so in order for the common people to understand what John McCain was really saying in his answers, we hired an every day American Citizen (AC) to explain what he really said.

O’REILLY: You voted against ANWR drilling. You voted against ANWR.

MCCAIN: Yes, and I’ll vote against drilling if they want to drill in the Grand Canyon, and I’ll vote against it if they want to drill in the Everglades. And I will try to make it more attractive for Florida and California and other states to have drilling off of their coasts, but I’m not going to force them to because…

(AC) Even though comparing ANWR to the Grand Canyon and the Everglades is lame, I don’t want any drilling in the United States.

O’REILLY: But no one lives in ANWR.

MCCAIN: No, it’s pristine beauty.

(AC) Yes, I know it’s a frozen wasteland but to me it’s pristine frozen wasteland and I want it to stay that way. I think it’s pretty and what I think is all that matters.

O’REILLY: So what? Who sees it?

MCCAIN: Well, all I do is believe that we have to preserve some of the great natural treasures of this earth…

(AC) I don’t care, we’re not going to drill there!

O’REILLY: In the Arctic Circle?

MCCAIN: …no matter where they are, my friend. And I…

(AC) Listen jerk, didn’t you hear what I said? You’re pissing me off now by these questions. I don’t care where ANWR is located, I said no drilling!

O’REILLY: You know, a lot of people aren’t going to like that.

MCCAIN: I know a lot of people don’t like it, but I am also an environmentalist. And so was Teddy Roosevelt, my hero. And I believe that there are just some things that you have to…

(AC) I don’t care what the American people say or want; their not me. I follow the teachings of the Gormonites and its high priest, Al Gore. Teddy Roosevelt loved the outdoors and I love my frozen waste land on top of the world because that’s where I’ll be when I win the White House, on top of the world looking down at you little people.