Archive for the ‘Economics’ Category

Barack H. Obama’s Legacy, Part 7

ObamaLegacyPart7 <– PDF

President Donald Trump recently withdrew the U. S. from the Paris Climate Accord, signed by President Obama. It was one of Mr. Obama’s foreign policies based on fundamental lies about the earth’s climate, one designed to ultimately transfer total governance of your life to government bureaucrats. The Paris Climate Accord was intended to reduce total carbon emissions by 2030, although Communist China and India, the two greatest polluters, were exempt. It is worse than that: the entire agreement is voluntary on the part of all the signatories. Now, if the various national signatories believed that climate change is man-made, and that we are all at risk of extinction if something isn’t done, why aren’t the emission reduction targets mandatory? Because the wealthy and powerful know that man-made climate change is a hoax. Even if the provisions were mandatory, and even if they are met, the net impact for the next 100 years was estimated to be about 0.2 degrees K, hardly worth the trouble. But, if the signatories are dumb enough to follow through on the reductions, there may be a significant impact to many peoples’ standard of living: at minimum, an increase in energy costs that would otherwise have been devoted to other needs and desires.

The activists clamoring for emission controls want you to believe that the recent warming of the earth’s temperatures has never occurred before. They are in effect demanding that you ignore all the history of the “little ice age” that occurred in the Northern Hemisphere from about 1350 to 1750 AD. During that time the earth was somewhat colder than it is now; in fact the earth was warmer than it is now during the period from about 750 to 1350 AD. Consider for example the history of Greenland. It was discovered by the Norwegian explorer Eirik the Red in 981. He stayed there, in a place called Snaefell (location unknown), then returned to Iceland, where he convinced a group of people to emigrate to Greenland. He called it Greenland, so the story goes, to give the illusion of a warm place where agriculture would pros-per. It was in fact, warmer than it is now. They eventually created two settlements, one in a place called Brattahlid (near present-day Qassiarsuk) and one called Godthaab (near present-day Nuuk). The historian Knut Gjerset [1] explains the early history as follows:

In spite of the cold climate and the dangers connected with navigation in these northern seas the colonies continued to grow until the Eastern Settlement [Brattahlid] had 190 farmsteads, twelve churches and two monasteries. The Western Settlement [Godthaab] had ninety dwellings and four churches. Together the two settlements probably had at the time of their greatest prosperity about 2000 people. The settlers found no native inhabitants in Greenland, though numerous traces of human habitation convinced them that the country was inhabited. The old Icelandic historian Ari Frodi says: “They found remnants of human dwellings both eastward and westward in the land, stone weapons and fragments of boats, from which it was evident that the same people who inhabit Vinland, and whom the people of Greenland call Skraelings, had also sojourned there”. But the Skraelings, or Eskimos, who inhabited this region must have moved to other hunting grounds, as they did not return until a later period. The climate and general conditions in Greenland were found to be much the same as in Iceland. The winters are long and cold, and the sea is usually strewed with icebergs even late in spring, but in the summer a green belt of vegetation stretches along the western coast. During this season of the year the weather is agreeable and the scenery is beautiful. No woods exist, but there is an abundance of grass, flowers, berries, and brush of dwarfed birch trees. The clear air and blue fjords, the glaciers and snow-covered mountains give the region in summer time a serene and tranquil beauty equal to that of any region in the far North. Fish are found in great abundance in the streams as well as in the sea; and seals, walrus, polar bears and furbearing animals are plentiful. Cattle, sheep, goats and horses thrived well and were kept in goodly numbers by the settlers. For want of other building material the houses were erected of stone, and as the dwellings were usually structures of considerable size, with separate stables for sheep, horses and cattle, many remnants are still to be seen in Greenland of the buildings erected by the early settlers. In the Eastern Settlement the ruins of several churches and of about one hundred dwellings have been found.

So, prior to year 981 AD, Greenland had become too warm for the Eskimos, who moved north. Greenland was warm enough to support grazing by cattle, horses, and sheep. The colonists disappeared by about 1450; the most common explanation is the reduction of trade with Norway, the Black Death of 1349, and the return of the Eskimos when the little ice age set in, who absorbed the few remaining colonists. Thus we learn that the global temperature changes occur in long protracted cycles spanning several centuries, and man has little, if anything to do with it. The warming from 750 to 1350 was certainly not caused by man’s industrial pollutants, as those did not begin to appear until about 1700.

The Paris Climate Accord is typical of Mr. Obama’s foreign policies: anything to appease the screeching activists, even if the entire theory is false, and anything to create an excuse to reduce America’s position in the global economy.

[1] Knut Gjerset, History of Iceland, New York: The Macmillan Company, 1925, pp. 95, 96

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Barack H. Obama’s Legacy, Part 6

ObamaLegacyPart6  <– PDF

Returning to Mr. Obama’s governing principle, as noted in the first edition, it is evident that his domestic policy was founded on economic and political socialism. It was seen early on in his confrontation during the 2008 campaign with Samuel J. Wurzelbacher, a.k.a. “Joe the Plumber”.  On 16 Oct 2008, Mr. Wurzelbacher asked Mr. Obama about tax policy regarding small businesses, and Mr. Obama responded a long roundabout answer in which he concluded that “when you spread the wealth around, it’s good for everybody”.

Pretty weak response for a Messiah, I might add. In any case, Mr. Obama’s remark was often cited as symptomatic of the kind of “politics of envy” practiced so well by socialists.  Under the notion of envy, Joe is regarded as evil because Joe enjoys a higher economic status than other people.  But it is worse than that — this remark was evidence that Mr. Obama has bought into the false notion that if one person gains, it is only because another person (or group) has lost.  He fails to see, as do all socialists, that every exchange is made because everyone benefits at least indirectly. If we apply that correct principle to Joe the Plumber it works out like this.

When Mr. Obama goes into his kitchen and turn on his tap water, he enjoys fresh water because of the efforts of Joe and all the other plumbers for the last several centuries who have figured out how to provide fresh water, collect the dirty water, transport it to a purification station, clean it up and recycle it, and pump it back to Mr. Obama’s kitchen tap. All the efforts of all those people over that time has led to fresh water for nearly all Americans (unless you live in Flint MI, where the illustrious local government poisoned it).  Joe did not invent the science of plumbing; he is a focused, specialized practitioner of the accumulated science.  His benefit to society manifests itself such that that if someone in the community has a plumbing problem, it is much cheaper, more convenient, and faster for him to call a professional plumber than it is to fix it himself (at least for most people).  That is because most people live by specialization themselves — whether they are doctors, electricians, mechanics, or social workers.  Everyone benefits from specialization because those services are, in the long run, cheaper than doing those things oneself.  In other words, if one earns a profit from some activity or profession, someone else gains.  The person who needs plumbing work generally gains because Joe is available to do it cheaper than he could do it himself.

This whole notion that the profit of one is also a profit to another is counter to the socialist maxim that one who profits does so only at the expense, or loss of another. The fact that Joe the Plumber worked hard and has a successful business is evidence to the socialist that he is an exploiter of his customers; failing to realize that if Joe really were exploiting his customers, he would soon not have any left due to competition in a free society.  This blind spot on socialist theory has led them, including Mr. Obama, to conclude that it is the government’s duty to prevent “exploitation” by private enterprise  in order to ensure equality for all.  A socialist never reveals how he will achieve equality, or in what manner equality is measured and verified.  Government can only do things by force: it has no moral compass.  “Equality” is reached in a socialist society when the ruling elite continuously takes as much as it can without provoking a revolution.

Mr. Obama had made an earlier speech (13 Jul 2008) about small business, in which he pointed out that although businessmen work hard, they also benefit from roads and bridges and other infrastructure, concluding “you didn’t build that”. It is true that everyone benefits from those latter categories, not just Joe: did not Mr. Obama also benefit?  Of course: but Mr. Obama accuses Joe and other successful people of ignoring those common benefits (i.e., what was called “the common good” in the U. S. Constitution, if he had read it), and uses them in his exploitation, conveniently forgetting that while the government may have managed the building of that infrastructure, it was the working people like Joe that paid for it.  They continue to pay for it; but Mr. Obama apparently wants us to believe that thinks that the governmental ruling class provides these for free out of their own pockets.

Socialists believe that someone must lose when someone else profits. But he himself has made a great deal of money by publishing several books, although he did not invent papermaking, or typesetting, or binding or editing, or all the other efforts that go into publishing a book.  He didn’t build publishing any more than Joe built plumbing, yet he claims Joe is the exploiter.  Mr. Obama took advantage of the copyright laws (established for the common good) just as Joe took advantage of the public utilities.  Now, if Joe is an exploiter who caused people to lose when he gained from his plumbing business, maybe Barack the Messiah can give us a list of names of those who lost because he gained on the publication of his books.

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Barack H. Obama’s Legacy, Part 5

ObamaLegacyPart5 <– PDF

In closing out Mr. Obama’s domestic agenda, we come to the state of the national debt. The national debt had been growing for many years, but it reached and surpassed a critical point during Mr. Obama’s tenure.  It is true that President’s are not directly responsible for the nation’s debt (because only Congress can authorize a budget), but Presidents can use their influence to restrain the worst instincts of Congress.  Mr. Obama did nothing but encourage Congress’ reckless spending.  Figure 1 shows the nation’s GDP, total national debt, and ratio of GDP to debt for the years 1929 to 2016 in current-year dollars.  The ratio of GDP to debt is an important indicator of the nation’s liabilities compared to its total economic activity; higher is better.  These figures are not exactly in alignment, since the debt figures are for fiscal years, and the GDP values are for calendar years.  The general trend is accurate.

Figure 1: GDP, National Debt, and GDP-to-Debt Ratio, 1929 – 2016

Figure 2 shows the ratio of debt to GDP for the same interval. When Hoover entered office in 1929, the nation’s finances were in excellent shape, as the GDP-to-debt ratio was over six.  Then came the Great Depression, which nitwit Hoover made worse with his bad policies.  The GDP-to-debt declined drastically in the early 1930’s.  It was left to the even bigger nitwit Roosevelt to extend the depression to 1940 with his even worse policies, although the GDP-to-debt remained fairly static around 2.5 from 1934 to 1940.    It was not until Hitler rescued Roosevelt by starting World War II that the American economy came back to life.  The downside in financial terms is that the expansion of production was paid for by adding it onto the debt.. The GDP to debt ratio reached its all-time low in 1946 (0.82), just after the enormous debts accumulated during World War II.  From the Truman to Nixon administrations, the debt increased, but GDP increased faster, and the GDP to debt ratio steadily improved, reaching 3.16 in 1974.  It remained fairly steady until the halfway through Reagan’s first term; it then began a long slow protracted decline until halfway through the Clinton administration.  It improved a bit from there until about 2007, the second-last year of Bush Jr. administration, and then resumed its steady decline until sinking below 1.0 in 2014.  It is interesting to observe that one can draw a straight line from 1994 to 2011 and end up in the same place. It has continued a slight decline since 2014.

Many economists consider a GDP-to-debt ratio to be an accurate indicator of high risk. It is comparable to a household with debt equal to an entire year’s income.  In the long run, it is unsustainable.

So the U. S. financial condition is now about where it was in 1947.  But there is a big difference between the federal government obligations in 1947, wherein it began a long period of improvement, and now.  In 1947, there was no Medicare, no Medicaid, no Obamacare with its subsidies, no extensive social spending, no pervasive meddling bureaucracy to be paid, and Social Security was only a small item in the budget.  Mr. Obama was content to let the financial condition deteriorate without making some sort of attempt to get back on a sound financial footing.  We can only hope that Mr. Trump will not make the same mistake.

Figure 2: GDP-to-Debt Ratio, 1929-2016

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Success in America’s Major Cities

SuccessInAmericasMajorCities  <– PDF version

An examination of the economic situation in our major cities proves that you can’t argue with success.  The success I’m referring to is the political success the Democratic Party has had in winning municipal elections and controlling the economic future of our major cities, mostly in the Northeastern states.  The economic policies that have been implemented over the past two generations are laughable; the disasters are evident to anyone with even a teaspoon of common sense.  But the Democratic Party parties on in these places, continuing the same economic policies that turned industrial giants into pathetic basket cases.  Here is a list of major U. S. cities, and the durations over which the Democratic Party has been in control:

Baltimore, MD:  Continuous Democratic Party control since 1967 (48 years)

Boston, MA:  Continuous Democratic Party control since 1930 (85 years)

Buffalo, NY:  Continuous Democratic Party control since 1966 (49 years)

Chicago, IL:  Continuous Democratic Party control since 1931 (84 years)

Cincinnati, OH: Continuous Democratic Party control since 1984 (31 years)

Cleveland, OH: Continuous Democratic Party control since 1990 (25 years)

Detroit, MI: Continuous Democratic Party control since 1962 (53 years)

Erie, PA: Continuous Democratic Party control since 1966 (49 years)

Newark, NJ: Continuous Democratic Party control since 1962 (53 years)

Pittsburgh, PA: Continuous Democratic Party control since 1934 (81 years)

Philadelphia, PA: Continuous Democratic Party control since 1952 (63 years)

St. Louis, MO: Continuous Democratic Party control since 1949 (66 years)

Washington, DC: Continuous Democratic Party control since 1961 (54 years)

Our largest city, New York, requires a little explanation.  It has been ruled by Democrats continuously since 1970, with the exception of the Giuliani and Bloomberg administrations.  Both of these men were elected as Republicans, but in fact Bloomberg is as hard-core a Marxist as you will find anywhere (now that he made his fortune).  It is fair to say then, that except for the eight years of Giuliani, New York has been run by Democrats for 37 of the last 45 years.

With this list of enormous successes, we can now say for sure what the benefits of socialism amount to: a) High taxes on nearly everything; b) Stringent regulation on nearly everything; c) Reduction of business opportunities; d) Scarcity of work; e) Poor public services; f) Dangerous streets; and above all, g) An arrogant, incompetent, entrenched oligarchy at the top, living the high life.

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