American Elephants

A Powerful Image. by The Elephant's Child

I am very interested in the relationship between good visuals and ideas. Is an idea well-stated easier to understand, or is it the visual, or is it only in the correct melding of the two? Political cartoonists labor in that realm.  This elegant rendering of the problem of our debt, by Michael Ramirez of Investors, is a heck-of-a-lot more impressive than mere numbers. And the mere numbers have to offer an explanation of how to visualize a trillion — usually with another visual.

So when do we learn? Does a visual like this sink in better than a graph? We didn’t really realize it, but when “talking pictures” arrived, they changed our minds in some way. At least all those people who quote movie dialogue think differently.

And photography changed the way we think. Before photography many people never knew what the President of the United States looked like. Before microphones and recordings (and teleprompters) Presidents didn’t often make public speeches. George Washington’s Farewell Address was never spoken, it was only printed. And public speeches depended on the volume that the speaker could generate.   Now that we are surrounded with pictures, do we absorb words less? Do we avoid reading? I have no answers, only questions.

Why Things Aren’t Getting Better: by The Elephant's Child
November 12, 2012, 5:55 pm
Filed under: Capitalism, Economy, Statism, Taxes | Tags: , ,

President Obama managed to convince the people last Tuesday that government spending stimulates the economy, and that he cares about them. Perhaps he does care, but he’s way off on the government spending:

The Obama administration spent $5.60 for
every $1 of economic growth.

For the government to function, it needs to sell its debt at very low interest rates. The world has usually liked our debt, because they trust the United States to pay them back. If the world doesn’t want to buy our debt (our bonds), then bond prices will fall, interest rates will rise, and the government will be spending huge amounts of money just to pay the interest rates on our debt.

So who is buying our debt? It is our very own Federal Reserve which buys 70% of our debt. To get the money to buy the debt — they print money. But even if they are just printing money, that debt must be paid back, and interest rates can’t really get any lower. Which means that the government is running on fumes.

The Obama administration spent $5.60 for
every $1 of economic growth.

This means that the left hand of the government is borrowing money from the right hand of government. There is no one on the planet, whether it is the rich or the Chinese who can afford to continue bankrolling that rate of the return. And that’s why government spending not only doesn’t stimulate the economy, when a big chunk of the funds meant to stimulate the economy go into the pockets of cronies, it is not a hopeful solution.

Everything You Need to Know About Raising Taxes by The Elephant's Child

There’s a lot about economics that is counterintuitive, and for the most part, liberals just don’t understand that. More than that, they deliberately reject the idea when it is explained. Perhaps it’s just not in their DNA.

For example: the minimum wage, which is meant to be the bottom limit for beginning workers, and is meant to protect innocents from exploitation. For liberals, it’s not enough pay for a poor person and his family. But the minimum wage is not directed to a worker and his family. By the time someone has a family to support, they can be assumed to have worked.

True beginners aren’t worth very much. They don’t know how to sweep the floor, how to answer the telephone, how to speak to customers, and how to follow the rules of the business. The manager is going to have to teach them all these things before they can be turned loose to do them properly on their own. All workers are a cost to business, but at a certain level of productivity, their work pays for their cost and makes money for the employer. Most minimum wage employees get a raise within the first six months.  When they become useful, their reward grows. When government raises the minimum wage, it increasingly eliminates job openings for beginners, depending on how high the minimum wage becomes. There is a reason why there are ATM machines, and more and more stores have self-checkout machines.

If you raise taxes, you get more revenue, right? Liberals hate the Laffer Curve because it directly attacks a cherished belief. Raising taxes has always been their solution to their constant need for more revenue to support Big Government. If they were to give up on the idea that they cannot constantly raise taxes, they would have to give up on the idea that they can constantly increase the size of government. They would become Republicans.

From June 2009 to September 2012, America gained some 2.59 million jobs. That weak recovery was what Obama bragged about. But nearly all of the job creation occurred in right-to work states, states in which no industry can force a worker to join a union in order to work. There are 22 right-to-work states, and those states were responsible for 72% of all net household job growth. But don’t unions get better pay for their workers? Many workers don’t believe that it matters.

Peter Ferrara wrote in Forbes on Friday that:

If those who make the sacrifice to save and take the risk of investing find that the government is only going to seize their savings and investment when they are successful, they will soon sharply reduce their savings and investment, at least here in America. That will only hurt the middle class and the poor the most, as they lose the jobs and rising wages and incomes essential to their own personal prosperity.

But that is all only going to get much worse in Obama’s second term, as his policies produce renewed recession, double digit unemployment, collapsing real wages and incomes, and new poverty records.

In a market economy, consumer demand can never be inadequate for the economy to grow and prosper. If demand is not sufficient to clear the market for any good or service, the price of the good or service will fall until demand equals supply.

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