Economic Meme of the Season
What this economy needs is an injection of demand.
Sure, we've been hearing this around for a while. Once the neo-Keynesians took office, we knew we would. But, it started sotto voce, like a teenager trying out a new vulgarity, and now the crescendo is building. It's at Huffpo in regard to extension of the payroll tax cuts. The National Journal is quoting a Wall Street Journal survey on the lack of demand inhibiting new hiring. We hear it all over the place from pundits and politicians alike. We must have more demand! It conveniently explains "the greedy rich hold way too many of the resources which they're hording" and the "income inequality is the problem" memes as well.
Peter Schiff doesn't think so. He likens the cry for "more demand" or "more stimulus" to a junkie needing another hit of heroin. Schiff says what we really need is some time in rehab (recession is the treatment) and for the government to get out of the way of the three things which really would improve the economy:
Savings, Investment, Production
None of which is achieved by government taxing the rich, allocating resources, regulating business, and "investing" in our future. Schiff also says the time is short, maybe too short to survive the campaign season. The following are excerpts from his testimony before Congress.
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Dec '10
Re: Economic Meme of the Season
Thanks for posting this. Too bad about the abrupt cuts.
Jun '10
Re: Economic Meme of the Season
Gotta love the catch-22 argument: There is still a demand for our bonds, so we can issue more bonds"
The reason there is a demand for bonds is because interest rates are in the toilet and banks are buying bonds because they can't cover the risks of business loans in the market, never mind make a profit on the loans.
Another great argument for regulation: We have got to control e-coli in hamburger, so let's agree that NLRB is doing a fine job in South Carolina.Hey! Boeing workers, especially the non-union workers, eat a lot of hamburger, right? To admit that one regulation is good is not to say that all or even most regulations are good.
Dec '10
Re: Economic Meme of the Season
Cas Balicki: Gotta love the catch-22 argument: There is still a demand for our bonds, so we can issue more bonds"
The reason there is a demand for bonds is because interest rates are in the toilet and banks are buying bonds because they can't cover the risks of business loans in the market, never mind make a profit on the loans.
Another great argument for regulation: We have got to control e-coli in hamburger, so let's agree that NLRB is doing a fine job in South Carolina.Hey! Boeing workers, especially the non-union workers, eat a lot of hamburger, right? To admit that one regulation is good is not to say that all or even most regulations are good. ·
Oh yeah, the incoherence of the good doctor is striking. Meanwhile, Peter Schiff just tells it straight. He is easily understood by anyone with the ears to hear.
The bond bubble would be laughable if only... And regulating food safety seems pretty desirable, until one acknowledges that killing off one's customers with tainted food probably isn't a good business model anyway.
Edited on Sep 18, 2011 at 7:04pmDec '10
Re: Economic Meme of the Season
This is labeled FULL Testimony, but I haven't watched it to know whether it is edited with cuts as well.
Jul '10
Re: Economic Meme of the Season
Can I demand a less stupid political class?
Jun '10
Re: Economic Meme of the Season
The old American entrepreneur's dream was to strike it rich, and sky's the limit. The new American entrepreneur's dream is to "do well," but still manage to fly under the Democrats' "pay your fair share" (soak the rich) radar. There were a lot more employment opportunities using the old strategy.
Mar '11
Re: Economic Meme of the Season
What this horse needs is a faster cart.
Dec '10
Re: Economic Meme of the Season
I have a couple brothers in the printing business. They've managed to find the sweet spot you're referring to, etoiledunord. Still, it only takes one disgruntled employee to sue them or turn them over to the feds for some regulatory violation they don't even know they're committing. Being an entrepreneur these days takes crazy courage and street smarts.
Jun '11
Re: Economic Meme of the Season
Western Chauvinist
I have a couple brothers in the printing business. They've managed to find the sweet spot you're referring to, etoiledunord. Still, it only takes one disgruntled employee to sue them or turn them over to the feds for some regulatory violation they don't even know they're committing. Being an entrepreneur these days takes crazy courage and street smarts. · Sep 18 at 7:01pm
This, Western Chauvinist and etoiledunord, is a great post and should illuminate to everyone that as Mark Levin says we'll all be in the rice fields if this continues.
Mark Steyn and others talk about the growing underground economy. Its going to be the only way to go soon.
I've had a small business for 11 years and have not missed any meals. Although I have never been sued, I am scared to death of the liability I assume for pennies it seems.
May '10
Re: Economic Meme of the Season
Thanks for the videos. That bit at the end about Henry Ford's wages versus the cost of his products is astounding.
Aug '10
Re: Economic Meme of the Season
The meme is half correct: "What this economy needs is... demand". The fallacy is the idea that government can inject demand at will.
There is a very narrow, very specific, small set of circumstances where Keynesian spending actually manages to create new demand and achieve a real positive spending multiplier. The US economy has not been in such a situation for the last 3 years' worth of crisis.
(Arguably, it briefly looked like we were in that situation around early 2009. But anyone focused on critical analysis, instead of short term GDP and unemployment, would have discovered obvious problems of leverage and debt, and would have seen thorough the misconception.)
Nov '10
Re: Economic Meme of the Season
They are uncomfortable with this meme because these are the same voices who have always vilified "consumerism". Essentially what they're saying is that we need more consumerism, and we must stoke the coals. Heh heh!