Killing the Goose | RealClearPolitics
EXCERPTS:
"Many people think of labor unions as organizations to benefit workers, and think of employers who are opposed to unions as just people who don't want to pay their employees more money. But some employers have made it a point to pay their employees more than the union wages, just to keep them from joining a union.
"Why would they do that, if it is just a question of not wanting to pay union wages? The Twinkies bankruptcy is a classic example of costs created by labor unions that are not confined to paychecks.
"The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.
"All of this was obviously intended to create more jobs for the unions' members. But the needless additional costs that these make-work rules created ended up driving the company into bankruptcy, which can cost 18,500 jobs. The union is killing the goose that laid the golden egg.
Showing posts with label Sowell. Show all posts
Showing posts with label Sowell. Show all posts
Wednesday, November 21, 2012
Tuesday, July 31, 2012
Milton Friedman's Centenary - by Thomas Sowell
Milton Friedman's Centenary | RealClearPolitics
EXCERPT:
"No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him. As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman's course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting."
EXCERPT:
"No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him. As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman's course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting."
Tuesday, May 29, 2012
'Meaningful Work' - Thomas Sowell
RealClearPolitics - 'Meaningful Work'
In the real world, many things are done simply because they have to be done, not because doing them brings immediate pleasure to those who do them. Some people take justifiable pride in working to take care of their families, whether or not the work itself is great.
Some of our more Utopian intellectuals lament that many people work "just for the money." They do not like a society where A produces what B wants, simply in order that B will produce what A wants, with money being an intermediary device facilitating such exchanges.
Some would apparently prefer a society where all-wise elites would decide what each of us "needs" or "deserves." The actual history of societies formed on that principle -- histories often stained, or even drenched, in blood -- is of little interest to those who mistake wishful thinking for idealism.
In the real world, many things are done simply because they have to be done, not because doing them brings immediate pleasure to those who do them. Some people take justifiable pride in working to take care of their families, whether or not the work itself is great.
Some of our more Utopian intellectuals lament that many people work "just for the money." They do not like a society where A produces what B wants, simply in order that B will produce what A wants, with money being an intermediary device facilitating such exchanges.
Some would apparently prefer a society where all-wise elites would decide what each of us "needs" or "deserves." The actual history of societies formed on that principle -- histories often stained, or even drenched, in blood -- is of little interest to those who mistake wishful thinking for idealism.
Saturday, March 31, 2012
Race, Rhetoric, Reality, and Consequences
RealClearPolitics - Race and Rhetoric
EXCERPTS:
"Race is just one of the areas in which the rhetoric and the reality often go in opposite directions. Political rhetoric is intended to do one thing -- win votes. Whether the policies that accompany that rhetoric make people better off or worse off is far less of a concern to politicians, if any concern at all.
***
"One of the many reasons why rhetoric does not automatically translate into reality is that the ramifications of so many government policies produce results completely different from what was claimed, or even believed, when these policies were imposed.
EXCERPTS:
"Race is just one of the areas in which the rhetoric and the reality often go in opposite directions. Political rhetoric is intended to do one thing -- win votes. Whether the policies that accompany that rhetoric make people better off or worse off is far less of a concern to politicians, if any concern at all.
***
"One of the many reasons why rhetoric does not automatically translate into reality is that the ramifications of so many government policies produce results completely different from what was claimed, or even believed, when these policies were imposed.
Monday, March 12, 2012
James Q. Wilson (1931-2012) may have saved your life
RealClearPolitics - James Q. Wilson (1931-2012)
EXCERPTS:
"Prior to 1960, murder rates in the United States had been going down for decades. Even the absolute number of murders declined, while the population grew by millions. Despite the addition of two new states -- Hawaii and Alaska -- in 1960, the number of murders in the 50 states was less than it had been in the 48 states thirty years earlier.
"The murder rate in 1960 was just under half of what it had been in 1934....
"By systematically confronting the prevailing notions and rhetoric with undeniable facts to the contrary, James Q. Wilson began to wear away the prevailing social dogmas of intellectuals behind the counterproductive changes in law and society. It was much like water wearing away rock -- slowly but continually.
"The common sense that had once produced and sustained declining crime rates began to reappear, here and there, in the criminal justice system and sometimes prevailed. Murder rates began to decline again. James Q. Wilson was the leader in this fight. He said, "We have trifled with the wicked.
"There is no way to know which ones of us are alive today because of his work. But we all owe him a debt of gratitude.
EXCERPTS:
"Prior to 1960, murder rates in the United States had been going down for decades. Even the absolute number of murders declined, while the population grew by millions. Despite the addition of two new states -- Hawaii and Alaska -- in 1960, the number of murders in the 50 states was less than it had been in the 48 states thirty years earlier.
"The murder rate in 1960 was just under half of what it had been in 1934....
"By systematically confronting the prevailing notions and rhetoric with undeniable facts to the contrary, James Q. Wilson began to wear away the prevailing social dogmas of intellectuals behind the counterproductive changes in law and society. It was much like water wearing away rock -- slowly but continually.
"The common sense that had once produced and sustained declining crime rates began to reappear, here and there, in the criminal justice system and sometimes prevailed. Murder rates began to decline again. James Q. Wilson was the leader in this fight. He said, "We have trifled with the wicked.
"There is no way to know which ones of us are alive today because of his work. But we all owe him a debt of gratitude.
Wednesday, September 14, 2011
RealClearPolitics - Why U.S. Health Care Leads the Way
RealClearPolitics - Why U.S. Health Care Leads the Way
EXCERPT:
"In [the vision that prevails widely among the intelligentsia], people can draw on the available resources only to the extent that the government considers appropriate, in the light of other claims on those resources. This treats what the people have produced as if it automatically belongs to the government -- and as if politicians and bureaucrats have both the right and the wisdom to override the personal decisions that the people want to make for themselves.
"This issue involves a difference between a world in which people can make their own decisions with their own money and a world in which decisions -- including life and death medical decisions -- are taken out of the hands of millions of people across the country and put into the hands of politicians and bureaucrats in Washington.
"One of the big claims for government-run medical systems is that they can "bring down the cost of medical care." But anyone can bring down the cost of anything by simply buying a smaller quantity or a lower quality.
EXCERPT:
"In [the vision that prevails widely among the intelligentsia], people can draw on the available resources only to the extent that the government considers appropriate, in the light of other claims on those resources. This treats what the people have produced as if it automatically belongs to the government -- and as if politicians and bureaucrats have both the right and the wisdom to override the personal decisions that the people want to make for themselves.
"This issue involves a difference between a world in which people can make their own decisions with their own money and a world in which decisions -- including life and death medical decisions -- are taken out of the hands of millions of people across the country and put into the hands of politicians and bureaucrats in Washington.
"One of the big claims for government-run medical systems is that they can "bring down the cost of medical care." But anyone can bring down the cost of anything by simply buying a smaller quantity or a lower quality.
Two Different Worlds - Thomas Sowell
RealClearPolitics - Two Different Worlds
EXCERPTS:
"Ideological clashes over particular laws, policies and programs often go far deeper. Those with opposing views of what is desirable for the future also tend to differ equally sharply as to what the reality of the present is. In other words, they envision two very different worlds.
***
"Judging businesses or their owners by how much wealth they give away -- rather than by how much wealth they create -- is putting the cart before the horse. Wealth is ultimately the only thing that can reduce poverty. The most dramatic reductions in poverty, in countries around the world, have come from increasing the amount of wealth, rather than from a redistribution of existing wealth.
"What kind of world do we want -- one in which everyone works to increase wealth to whatever extent they can, or a world in which everyone will be supported by either government handouts or private philanthropy, whether they work or don't work?
EXCERPTS:
"Ideological clashes over particular laws, policies and programs often go far deeper. Those with opposing views of what is desirable for the future also tend to differ equally sharply as to what the reality of the present is. In other words, they envision two very different worlds.
***
"Judging businesses or their owners by how much wealth they give away -- rather than by how much wealth they create -- is putting the cart before the horse. Wealth is ultimately the only thing that can reduce poverty. The most dramatic reductions in poverty, in countries around the world, have come from increasing the amount of wealth, rather than from a redistribution of existing wealth.
"What kind of world do we want -- one in which everyone works to increase wealth to whatever extent they can, or a world in which everyone will be supported by either government handouts or private philanthropy, whether they work or don't work?
Friday, August 19, 2011
Good Things - Thomas Sowell
EXCERPTS:
"Life has many good things. The problem is that most of these good things can be gotten only by sacrificing other good things. We all recognize this in our daily lives. It is only in politics that this simple, common sense fact is routinely ignored.
In politics, there are not simply good things but some special Good Things -- with a capital G and capital T -- which are considered always better to have more of.
Many of the things advocated by environmental extremists, for example, are things that most of us might think of as good things. But, in politics, they become Good Things whose repercussions and costs are brushed aside as unworthy considerations.
Nobody wants to breathe dirty air or drink dirty water. But, if either becomes 98 percent pure, 99 percent pure or 99.9 percent pure, there is some point beyond which the costs skyrocket and the benefits become meager or non-existent.
*****
"Higher miles per gallon for cars is a Good Thing in politics, even if it leads to cars too lightly built to protect occupants when there is a crash. More students going to college is another Good Thing, even if lowering standards to get them admitted results in lower educational quality for others.
Too much of a Good Thing is bad.
"Life has many good things. The problem is that most of these good things can be gotten only by sacrificing other good things. We all recognize this in our daily lives. It is only in politics that this simple, common sense fact is routinely ignored.
In politics, there are not simply good things but some special Good Things -- with a capital G and capital T -- which are considered always better to have more of.
Many of the things advocated by environmental extremists, for example, are things that most of us might think of as good things. But, in politics, they become Good Things whose repercussions and costs are brushed aside as unworthy considerations.
Nobody wants to breathe dirty air or drink dirty water. But, if either becomes 98 percent pure, 99 percent pure or 99.9 percent pure, there is some point beyond which the costs skyrocket and the benefits become meager or non-existent.
*****
"Higher miles per gallon for cars is a Good Thing in politics, even if it leads to cars too lightly built to protect occupants when there is a crash. More students going to college is another Good Thing, even if lowering standards to get them admitted results in lower educational quality for others.
Too much of a Good Thing is bad.
Tuesday, May 3, 2011
Fed Up with the Fed? - Thomas Sowell
EXCERPTS:
"Henry Morgenthau, Secretary of the Treasury under President Franklin D. Roosevelt, said confidentially to fellow Democrats in 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work."
As for the Federal Reserve today, a headline in the Wall Street Journal of April 25th said, "Fed Searches for Next Step."
That is a big part of the problem. It is not politically possible for either the Federal Reserve or the Obama administration to leave the economy alone and let it recover on its own.
Both are under pressure to "do something." If one thing doesn't work, then they have to try something else. And if that doesn't work, they have to come up with yet another gimmick.
All this constant experimentation by the government makes it more risky for investors to invest or employers to employ, when neither of them knows when the government's rules of the game are going to change again. Whatever the merits or demerits of particular government policies, the uncertainty that such ever- changing policies generate can paralyze an economy today, just as it did back in the days of FDR.
The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States.
During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down.
No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.
The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then-- and now.
"Henry Morgenthau, Secretary of the Treasury under President Franklin D. Roosevelt, said confidentially to fellow Democrats in 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work."
As for the Federal Reserve today, a headline in the Wall Street Journal of April 25th said, "Fed Searches for Next Step."
That is a big part of the problem. It is not politically possible for either the Federal Reserve or the Obama administration to leave the economy alone and let it recover on its own.
Both are under pressure to "do something." If one thing doesn't work, then they have to try something else. And if that doesn't work, they have to come up with yet another gimmick.
All this constant experimentation by the government makes it more risky for investors to invest or employers to employ, when neither of them knows when the government's rules of the game are going to change again. Whatever the merits or demerits of particular government policies, the uncertainty that such ever- changing policies generate can paralyze an economy today, just as it did back in the days of FDR.
The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States.
During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down.
No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.
The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then-- and now.
Saturday, February 26, 2011
Reckless Spending and lofty words - Thomas Sowell
EXCERPTS:
"Nothing more clearly illustrates the utter irresponsibility of Barack Obama than his advocacy of "high-speed rail." The man is not stupid. He knows how to use words that will sound wonderful to people who do not bother to stop and think.
High-speed rail may be feasible in parts of Europe or Japan, where the population density is much higher than in the United States. But, without enough people packed into a given space, there will never be enough riders to repay the high cost of building and maintaining a high-speed rail system.
*******
"High-speed rail" is simply another set of lofty words to justify continued expansion of government spending. So are words like "investment in education" or "investment" in any number of other things, which serves the same political purpose.
Who cares what the realities are behind these nice-sounding words? Obama can leave that to the economists, the statisticians and the historians. His point is to win the votes of people who know little or nothing about economics, history or statistics. That includes a lot of people with expensive Ivy League degrees.
To talk glibly about spending more money on "high-speed rail" when the national debt has just passed a milestone, by exceeding the total value of our annual output, for the first time in more than half a century, is world-class chutzpa. The last time the U.S. national debt exceeded the value of our entire annual output, it was due to the cost of fighting World War II."
"Nothing more clearly illustrates the utter irresponsibility of Barack Obama than his advocacy of "high-speed rail." The man is not stupid. He knows how to use words that will sound wonderful to people who do not bother to stop and think.
High-speed rail may be feasible in parts of Europe or Japan, where the population density is much higher than in the United States. But, without enough people packed into a given space, there will never be enough riders to repay the high cost of building and maintaining a high-speed rail system.
*******
"High-speed rail" is simply another set of lofty words to justify continued expansion of government spending. So are words like "investment in education" or "investment" in any number of other things, which serves the same political purpose.
Who cares what the realities are behind these nice-sounding words? Obama can leave that to the economists, the statisticians and the historians. His point is to win the votes of people who know little or nothing about economics, history or statistics. That includes a lot of people with expensive Ivy League degrees.
To talk glibly about spending more money on "high-speed rail" when the national debt has just passed a milestone, by exceeding the total value of our annual output, for the first time in more than half a century, is world-class chutzpa. The last time the U.S. national debt exceeded the value of our entire annual output, it was due to the cost of fighting World War II."
Tuesday, February 15, 2011
New Heroes vs. Old - Thomas Sowell
EXCERPTS:
"When I mention that my family used kerosene lamps when I was a small child in the South during the 1930s, that is usually taken as a sign of our poverty, though I never thought of us as poor at the time.
What is ironic is that kerosene lamps were a luxury of the rich in the 19th century, before John D. Rockefeller came along. At the high price of kerosene at that time, an ordinary working man could not afford to stay up at night, burning this expensive fuel for hours at a time.
Rockefeller did not begin his life as rich, by any means. He made a fortune by revolutionizing the petroleum industry. Although we still measure petroleum in barrels, it is actually shipped in railroad tank cars, in ocean-going tankers and in tanker trucks.
That is a legacy of John D. Rockefeller, who saw that shipping oil in barrels was not as economical as shipping whole railroad tank cars full of oil, eliminating all the labor that had to go into shipping the same amount of oil in numerous individual barrels.
That was just one of his cost-cutting innovations. If there was a better way to extract, process and ship petroleum products-- or more products that could be made from petroleum-- Rockefeller was on top of it.
Before he came along, gasoline was considered a useless by-product that petroleum refineries often simply dumped into the nearest river. But Rockefeller decided to use it as a fuel in the refining process, which made it valuable, even before automobiles came along.
"When I mention that my family used kerosene lamps when I was a small child in the South during the 1930s, that is usually taken as a sign of our poverty, though I never thought of us as poor at the time.
What is ironic is that kerosene lamps were a luxury of the rich in the 19th century, before John D. Rockefeller came along. At the high price of kerosene at that time, an ordinary working man could not afford to stay up at night, burning this expensive fuel for hours at a time.
That is a legacy of John D. Rockefeller, who saw that shipping oil in barrels was not as economical as shipping whole railroad tank cars full of oil, eliminating all the labor that had to go into shipping the same amount of oil in numerous individual barrels.
That was just one of his cost-cutting innovations. If there was a better way to extract, process and ship petroleum products-- or more products that could be made from petroleum-- Rockefeller was on top of it.
Before he came along, gasoline was considered a useless by-product that petroleum refineries often simply dumped into the nearest river. But Rockefeller decided to use it as a fuel in the refining process, which made it valuable, even before automobiles came along.
Saturday, February 12, 2011
The most basic economic question
"The most basic question is not what is best, but who shall decide what is best." – Thomas Sowell
Saturday, February 5, 2011
"Saving" the Housing Market - Thomas Sowell
EXCERPTS:
"Why are politicians so focused on one set of people, at the expense of other people? Because "saving" one set of people increases the chances of getting those people's votes. Letting supply and demand determine what happens in the housing market gets nobody's votes.
If current occupants are put out of their homes and the prices come down to a level where others can afford to buy those homes, nobody will give politicians credit-- or, more to the point, their votes. Nor should they.
Rescuing particular people at the expense of other people-- whether the others are taxpayers, savers or prospective home buyers-- produces votes. It also produces dependency on government, which is good for politicians, but bad for society.
"Why are politicians so focused on one set of people, at the expense of other people? Because "saving" one set of people increases the chances of getting those people's votes. Letting supply and demand determine what happens in the housing market gets nobody's votes.
If current occupants are put out of their homes and the prices come down to a level where others can afford to buy those homes, nobody will give politicians credit-- or, more to the point, their votes. Nor should they.
Rescuing particular people at the expense of other people-- whether the others are taxpayers, savers or prospective home buyers-- produces votes. It also produces dependency on government, which is good for politicians, but bad for society.
Saturday, January 1, 2011
Political End Runs
EXCERPTS:
"Professor Roscoe Pound likewise referred to the need for "a living constitution by judicial interpretation," in order to "respond to the vital needs of present-day life." He rejected the idea of law as "a body of rules."
But if law is not a body of rules, what is it? A set of arbitrary fiats by judges, imposing their own vision of "the needs of the times"? Or a set of arbitrary regulations stealthily emerging from within the bowels of a bureaucracy?
Louis Brandeis was another leader of this Progressive era chorus of demands for moving beyond law as rules. He cited "newly arisen social needs" and "a shifting of our longing from legal justice to social justice."
In other words, judges were encouraged to do an end run around rules, such as those set forth in the Constitution, and around the elected representatives of "we the people." As Roscoe Pound put it, law should be "in the hands of a progressive and enlightened caste whose conceptions are in advance of the public."
That is still the vision of the left a hundred years later. The Constitution cannot protect us unless we protect the Constitution, by voting out those who promote end runs around it.
"Professor Roscoe Pound likewise referred to the need for "a living constitution by judicial interpretation," in order to "respond to the vital needs of present-day life." He rejected the idea of law as "a body of rules."
But if law is not a body of rules, what is it? A set of arbitrary fiats by judges, imposing their own vision of "the needs of the times"? Or a set of arbitrary regulations stealthily emerging from within the bowels of a bureaucracy?
Louis Brandeis was another leader of this Progressive era chorus of demands for moving beyond law as rules. He cited "newly arisen social needs" and "a shifting of our longing from legal justice to social justice."
In other words, judges were encouraged to do an end run around rules, such as those set forth in the Constitution, and around the elected representatives of "we the people." As Roscoe Pound put it, law should be "in the hands of a progressive and enlightened caste whose conceptions are in advance of the public."
That is still the vision of the left a hundred years later. The Constitution cannot protect us unless we protect the Constitution, by voting out those who promote end runs around it.
Thursday, December 30, 2010
Rhetoric Rides Again
EXCERPTS:
"With unemployment compensation ...you are in fact giving someone something. "Extending unemployment benefits" always sounds good politically-- especially if you do not ask the basic question: "For how long should they be extended?" A year? Two years? No limit?
Studies have shown what common sense should have told us without studies: The longer the unemployment benefits are available, the longer people stay unemployed.
If I were fired tomorrow, should I be able to live off the government until such time as I find another job that is exactly the same, making the same or higher pay? What if I am offered another job that uses some of the same skills but doesn't pay quite as much? Should I be allowed to keep on living off the government?
With the government making it more expensive for employers to hire workers, and at the same time subsidizing unemployed workers longer and longer, you can have as much unemployment as you are willing to pay for, for as long as you are willing to pay for it.
"With unemployment compensation ...you are in fact giving someone something. "Extending unemployment benefits" always sounds good politically-- especially if you do not ask the basic question: "For how long should they be extended?" A year? Two years? No limit?
Studies have shown what common sense should have told us without studies: The longer the unemployment benefits are available, the longer people stay unemployed.
If I were fired tomorrow, should I be able to live off the government until such time as I find another job that is exactly the same, making the same or higher pay? What if I am offered another job that uses some of the same skills but doesn't pay quite as much? Should I be allowed to keep on living off the government?
With the government making it more expensive for employers to hire workers, and at the same time subsidizing unemployed workers longer and longer, you can have as much unemployment as you are willing to pay for, for as long as you are willing to pay for it.
Promises and Riots
EXCERPTS:
"Economists are the real "party of No." They keep saying that there is no such thing as a free lunch-- and politicians keep on getting elected by promising free lunches.
Such promises may seem to be kept, for a while. There are ways the government can juggle money around to make everything look OK, but it is only a matter of time before that money runs out and the ultimate reality hits, that there is no free lunch.
We are currently seeing what happens, in fierce riots raging in various countries in Europe, when the money runs out and the brutal truth is finally revealed, that there is no free lunch.....
"Economists are the real "party of No." They keep saying that there is no such thing as a free lunch-- and politicians keep on getting elected by promising free lunches.
Such promises may seem to be kept, for a while. There are ways the government can juggle money around to make everything look OK, but it is only a matter of time before that money runs out and the ultimate reality hits, that there is no free lunch.
We are currently seeing what happens, in fierce riots raging in various countries in Europe, when the money runs out and the brutal truth is finally revealed, that there is no free lunch.....
Wednesday, November 10, 2010
"We have tried spending money ... and it did not work." - Who said it?
EXCERPTS:
"Guess who said the following: "We have tried spending money. We are spending more than we have ever spent before and it does not work." Was it Sarah Palin? Rush Limbaugh? Karl Rove?
Not even close. It was Henry Morgenthau, Secretary of the Treasury under Franklin D. Roosevelt and one of FDR's closest advisers. He added, "after eight years of this Administration we have just as much unemployment as when we started. . . And an enormous debt to boot!
"This is just one of the remarkable and eye-opening facts in a must-read book titled "New Deal or Raw Deal?" by Professor Burton W. Folsom, Jr., of Hillsdale College. Ordinarily, what happened in the 1930s might be something to be left for historians to be concerned about. But the very same kinds of policies that were tried-- and failed-- during the 1930s are being carried out in Washington today, with the advocates of such policies often invoking FDR's New Deal as a model.
"Guess who said the following: "We have tried spending money. We are spending more than we have ever spent before and it does not work." Was it Sarah Palin? Rush Limbaugh? Karl Rove?
Not even close. It was Henry Morgenthau, Secretary of the Treasury under Franklin D. Roosevelt and one of FDR's closest advisers. He added, "after eight years of this Administration we have just as much unemployment as when we started. . . And an enormous debt to boot!
"This is just one of the remarkable and eye-opening facts in a must-read book titled "New Deal or Raw Deal?" by Professor Burton W. Folsom, Jr., of Hillsdale College. Ordinarily, what happened in the 1930s might be something to be left for historians to be concerned about. But the very same kinds of policies that were tried-- and failed-- during the 1930s are being carried out in Washington today, with the advocates of such policies often invoking FDR's New Deal as a model.
Wednesday, October 6, 2010
Politics, Gold, and Inflation - Thomas Sowell
EXCERPTS:
"Inflation is a quiet but effective way for the government to transfer resources from the people to itself, without raising taxes. A hundred dollar bill would buy less in 1998 than a $20 bill would buy in the 1960s. This means that anyone who kept his money in a safe over those years would have lost 80 percent of its value, because no safe can keep your money safe from politicians who control the printing presses.
That is why some people buy gold when they lose confidence in the government's managing of its money. Usually that is when inflation is either under way or looming on the horizon. When many people start transferring their wealth from dollars into gold, that restricts the ability of politicians to steal from them through inflation.
Even though there is currently very little inflation, purchases of gold have nevertheless skyrocketed. Ordinarily, most gold is bought for producing jewelry or for various industrial purposes, more so than as an investment. But, at times within the past two years, most gold has been bought by investors.
What that suggests is that increasing numbers of people don't trust this administration's economic policies, especially their huge and growing deficits, which add up to a record-breaking national debt.
When a national debt reaches an unsustainable amount, there is always a temptation to pay it off with inflated dollars. There is the same temptation when the Social Security system starts paying out more money to baby boom retirees than it is taking in from current workers.
"Inflation is a quiet but effective way for the government to transfer resources from the people to itself, without raising taxes. A hundred dollar bill would buy less in 1998 than a $20 bill would buy in the 1960s. This means that anyone who kept his money in a safe over those years would have lost 80 percent of its value, because no safe can keep your money safe from politicians who control the printing presses.
That is why some people buy gold when they lose confidence in the government's managing of its money. Usually that is when inflation is either under way or looming on the horizon. When many people start transferring their wealth from dollars into gold, that restricts the ability of politicians to steal from them through inflation.
Even though there is currently very little inflation, purchases of gold have nevertheless skyrocketed. Ordinarily, most gold is bought for producing jewelry or for various industrial purposes, more so than as an investment. But, at times within the past two years, most gold has been bought by investors.
What that suggests is that increasing numbers of people don't trust this administration's economic policies, especially their huge and growing deficits, which add up to a record-breaking national debt.
When a national debt reaches an unsustainable amount, there is always a temptation to pay it off with inflated dollars. There is the same temptation when the Social Security system starts paying out more money to baby boom retirees than it is taking in from current workers.
Wednesday, September 22, 2010
Confessions of an Exploited Teen - Thomas Sowell
Thomas Sowell talks about his experiences as a teenage worker and the effects of having a minimum wage law.
Tuesday, September 7, 2010
What Happened During the Depression? - Thomas Sowell
EXCERPTS:
"There are always calls for the government to "do something" when things are going bad. Those who make such calls have almost never bothered to check out what actually happens when the government does something, as compared to what happens when the government does nothing....
There are two conflicting assumptions about what happened during the Great Depression. The most popular assumption, especially among politicians, is that the market failed and the government had to intervene to save the economy.
Another assumption is that the market went down and was on its way back up when federal intervention sent it down again and led to massive unemployment. If you don't let facts get in the way, you can just pick whichever assumption you like-- and the first assumption wins that popularity contest, hands down.
But, if you look at the facts, they go like this: Unemployment never hit double digits in any of the 12 months following the big stock market crash of 1929 that is often blamed for the massive unemployment of the 1930s. Unemployment peaked at 9 percent, two months after the October 1929 crash, and then began drifting downward.
Unemployment was down to 6.3 percent by June 1930, when the first big federal intervention occurred. Within six months, the downward trend in unemployment reversed and hit double digits for the first time in December 1930.
What were politicians to do? Say 'We messed up'? Or keep trying one huge intervention after another? The record shows what they did: President Hoover's interventions were followed by President Roosevelt's bigger interventions-- and unemployment remained in double digits in every month for the entire remainder of the decade.
"There are always calls for the government to "do something" when things are going bad. Those who make such calls have almost never bothered to check out what actually happens when the government does something, as compared to what happens when the government does nothing....
There are two conflicting assumptions about what happened during the Great Depression. The most popular assumption, especially among politicians, is that the market failed and the government had to intervene to save the economy.
Another assumption is that the market went down and was on its way back up when federal intervention sent it down again and led to massive unemployment. If you don't let facts get in the way, you can just pick whichever assumption you like-- and the first assumption wins that popularity contest, hands down.
But, if you look at the facts, they go like this: Unemployment never hit double digits in any of the 12 months following the big stock market crash of 1929 that is often blamed for the massive unemployment of the 1930s. Unemployment peaked at 9 percent, two months after the October 1929 crash, and then began drifting downward.
Unemployment was down to 6.3 percent by June 1930, when the first big federal intervention occurred. Within six months, the downward trend in unemployment reversed and hit double digits for the first time in December 1930.
What were politicians to do? Say 'We messed up'? Or keep trying one huge intervention after another? The record shows what they did: President Hoover's interventions were followed by President Roosevelt's bigger interventions-- and unemployment remained in double digits in every month for the entire remainder of the decade.
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