Posts Tagged ‘Political Economics’

Trickle Down Economics: UPDATE

June 9, 2009

Anthony Martin over at the Liberty Sphere posted about the economic collapse and the current administrations apparent utter bewilderment at the failure of the pogrom that they ramrodded down the throats of Americans to corral it.

To those of us with an actual background in Economics this came as no surprise whatsoever. To those of us with an actual background in History it is a classic case of history repeating itself, and of people failing to have learned from it’s lessons.

To be sure, the current economic collapse cannot be laid at the feet of today’s administration in totality. The roots in fact  run much deeper. At least as far back as the Nixon Administration’s adventure into fiat money.

Fast forward a bit and we have the Congress mandating that banks issue home loans to people that, well? Shouldn’t have been given the loans. Then, we have the first auto bailout and guess what? Neither program worked, and in fact only served to make things worse. Third times a charm right? Not so. In point of fact every time the government interferes with our modified free market things go from bad to worse, and all the political spin in the world will not change that.

The current wailing and gnashing of teeth is a direct result of Trickle Down Economics. That should be apparent to all but the most dullard minds. These things are fluid and need to be recognized as such. While you may not believe in money flowing from investors to workers and such, it is pretty easy to see that when there is no money, no money flows.  There is no free lunch in the real world. Indeed, someone, somewhere paid for the “freebies.” Credit may be a needed and valuable tool, however, as California seems to finally be learning the day comes when the piper must be paid.

So? Are there any true solutions to this fiasco that we find ourselves in? Logic would dictate that we reverse what we have been doing. Which is the failed doctrine of Socialism. From the beginning days of this blog I have advocated that Freedom and Liberty offer solutions. Some years later, I stand by those beliefs.

Oh Lord, it’s hard to be humble…

October 22, 2008

Government regulation, not free-market greed, caused this crisis

As the song goes, it’s hard to be humble sometimes, at least when you post about political economic realities. Below is vindication of my earlier ststed position about the current financial crisis.

Many observers, including most politicians, have blamed the ongoing financial crisis on the “free-market greed” supposedly unleashed by the “reckless deregulation” of the financial system. Such arguments are rhetorically powerful, but they don’t stand up to scrutiny.

If they go unchallenged, however, they could hasten a “solution” that’s worse than the problem. That’s why it’s so important to examine the record. What it shows is that government regulations and other interventions – not greed – are the major cause of our current problems.

Greed, or at least self-interest, is always present to some degree in the economy. Why has greed suddenly produced so much harm, and why only in one sector of the economy?

Firms are profit seekers, but they will seek it where the institutional incentives signal profit is available. In a free market, firms profit by satisfying their customers, investing wisely, and making prudent loans. Regulations, policies, and political rhetoric can change those incentives.

When the law either poorly defines the rules of the game or tries to override them through regulation, the invisible hand that makes self-interested behavior mutually beneficial may become more of a fist.

In such cases, “greed” can lead to problems, not caused by greed but by the institutional context channeling self-interest in socially unproductive ways.

To call the housing and credit crisis a failure of the free market or the product of unregulated greed is to overlook the myriad government regulations, policies, and political pronouncements that have both reduced the freedom of this market and led self-interested actors to produce disastrous consequences, often unintentionally.

Full Story Here

Rebellious Republicans

July 28, 2008

Rebellious Republicans are flexing their muscles in California. More of this needs to be done around the country. The Democrat machine is all but set to destroy what we, as a nation have to believe in. That being limited government, free markets, as well as the general liberty and freedoms so long as we do not infringe on the liberty and freedom of others.

No Permanent GOP Minority
by Robert Novak
Posted: 07/07/2008

WASHINGTON, D.C. — When House Republican leaders left Washington for their Fourth of July break, they felt good about outwitting the Democratic majority. The feeling was not reciprocated 3,000 miles away, where conservative California Republican activists were drafting an ultimatum. The Lincoln Club of Orange County is telling GOP leaders of both the House and Senate that it is too late to repent. They must go — or else lose big money.

The message: “Come Nov. 5, should the current GOP leadership in either house survive to lead in a new Congress, the Lincoln Club of Orange County will review the financial backing of all congressional Republicans, and we urge others to do likewise. A GOP caucus that would re-elect such leaders is not one we would likely continue to support. Because, simply put, we refuse to support a permanent minority.”

The Lincoln Club estimates that its nearly 300 members will individually contribute $1.5 million to federal causes and candidates in the 2008 election cycle. The club is spreading its message to angry Republicans throughout California and around the nation. The ultimatum finds responsive members of the House (if not the Senate), who even now are preparing a housecleaning after the additional loss of seats in this year’s election.

House GOP leaders were triumphant June 27 as Congress recessed for a week. They had passed war funding and telephone surveillance bills with solid Republican backing and minority Democratic support. Chairman David Obey had just shut down the Appropriations Committee process so that Democrats would not be forced to vote on Republican oil-drilling proposals. The Republican leaders congratulated themselves that they were winning the debate over whether boosting production or curbing speculation is the proper response to runaway gasoline prices.

Unfortunately, say Republican reformers, it looked like the operation was a great success but the patient died. Popular though expanded drilling may be, Republicans are blamed for four-dollar gasoline. Away from the party leadership table, members blame a negative Republican image created by leaders.

That’s the view of the Lincoln Club paper signed by Rich Wagner, its president, and Chip Hanlon, a board member. It deplores refusal by party leaders to support a one-year moratorium on earmarks, whose 285 percent growth when Congress was under Republican control is “the perfect symbol of the GOP-led profligacy that drives us crazy still.” Earmarks “epitomize the fiscal recklessness that led to Republicans becoming a minority in 2006. … It’s no wonder the Republican leadership continued to fail on … entitlement reform and a reduction in federal spending.”

The Lincoln Club blasts conservative Rep. Jack Kingston of Georgia, whose personal earmarks totaled $83 million last year, for defending his pork as “being entrepreneurial about bringing something home.” It also assails conservative Rep. Thaddeus McCotter of Michigan, a member of the leadership who has opposed earmark reform and voted on the floor against only one earmark. With his annual earmarks totaling $22.5 million, McCotter declared a year ago, “I will not unilaterally disarm my donor state.”

On June 25, however, McCotter apparently felt enough heat to disarm unilaterally, with a surprise announcement that he had requested no earmarks this year. It may be too late for the 42-year-old third-termer, threatened with losing his House Republican Policy Committee chairmanship after only two years if the Lincoln Club of Orange County gets its desired clean sweep.

“We urge other Republican donor groups to reinforce this important beginning,” read the club’s ultimatum, adding, “It is not credible to ask the American people to return Republicans to the majority when all we offer them is the same group of leaders and policies they so recently rejected.”

The statement asserts these leaders “have no idea what we say when we get together” and are “still oblivious to the source of our discontent.” Now, if these contributors have their way, it is too late for the leaders. Senate Minority Leader Mitch McConnell, who began his campaign for re-election in Kentucky by bragging about his earmarks for the state, probably has more to worry about from his Democratic election foe than insurgent Republican senators. House Minority Leader John Boehner, who sponsors no earmarks himself but has not backed reform, faces an all-too serious challenge.

http://www.humanevents.com/article.php?id=27384

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