American Elephants


Do the Rich Pay Their Fair Share? by The Elephant's Child

Here’s noted economist and economics professor Lee Ohanian from U.C.L.A. clarifying things a little for the ignorant. Or — all about income inequality, and other leftist confusions.



The Decline and Fall of Socialist Venezuela by The Elephant's Child

food-line-in-venezuela-san-cristobal

( A food line in San Cristobal, Venezuela)

Bernie Sanders is out in the hustings talking about banning fracking, the new way of producing oil and natural gas that has brought down the cost to consumers so dramatically. In Venezuela, the price of oil, Venezuela’s only significant export, has plummeted which means that government income will probably be down by around 40 percent this year. A disaster for this socialist paradise.

The government’s massive borrowing—a legacy of the days when oil prices were far higher, is blamed, but specifically, the lingering death of a beautiful country can be blamed directly on socialism. You will notice that the reporting on the decline and death throes of Venezuela seldom contains any mention of socialism. It is undoubtedly not on the list of approved talking points. They’re having trouble repaying their foreign debt. On top of that there has been a drought, which has meant trouble for the country’s hydropower generation, which in turn has meant that  power is only available part of the time. It’s back to candles if you have any.

The Manhattan Contrarian has been checking left-wing websites: the Huffington Post has a post titled “Why Venezuela is on the Verge of Actual Collapse” on May 20. Five reasons are given: 1. Murder—lots of murder; 2. Low oil prices—not always a good thing;  3. Plummeting economy; 4, Scarcity of essential goods; 5. Widespread corruption.

I particularly like reasons 3 and 4. The economy is collapsing because the economy is collapsing! Why hadn’t we figured that our on our own?

Socialism is unmentioned, though anybody with any knowledge of history has a long list of collapsing economies due to Socialism. It’s what economies that turn to socialism do. I guess you can’t run around badmouthing socialist systems when your presidential candidates seem to think it’s the answer to something or other.

It is, of course, the answer to government control of everyone. Every Progressive has dreams of becoming Ceasar Chavez, or Fidel Castro, or Pol Pot — becoming fabulously rich and being in charge of everything.

Zero Hedge talked to Fernando Aquirre who recorded the hyperinflation in Argentina in 2001, and has followed the story of other collapsing economies.

The greatest points to keep in mind is overwhelming corruption. People get lost on what exactly went wrong in Argentina, in Venezuela, or what’s happening right now in Brazil. What they all have in common is that the people in charge had no real interest in doing things right; they really didn’t care about destroying the country. They just cared about filling their pockets as much as possible.

Think of Venezuela this way: you have a country where water is more expensive than gasoline. What sense does that make? I mean, you had Hugo Chavez walking down the street pointing with his finger saying “Nationalize this. Nationalize that”. And when he was saying “nationalize”, he was saying “Steal this“. He didn’t have any great plans or political grandeur going on in his mind. He just wanted to steal as much as he could.

I know for a fact that they’re slaughtering one another in the streets right now in Venezuela. For at least three years it’s been a case of out-of-control crime and corruption over there. It’s not getting better any time soon unless something changes on a deeper level.

It’s not just that there’s no toilet paper. There’s no medicine, and those dependent on medicines are dying. The middle class person who still has a good job would need two years of wages to pay for a single plane ticket out. Aguirre said that if he was in Venezuela right now he would leave on foot, any way he could. And we have college students who think socialism is a great idea, and ‘feel the bern’ for Bernie.

20160603_venezuelasupermarket_0

Here’s economist Thomas Sowell with “Socialism for the Uninformed

And law professor Glenn Reynolds: “Don’t Be a Sucker for Socialism



New Jobs in May the Worst Since 2010 by The Elephant's Child

The Labor Department announced that the pace of hiring in the economy slowed sharply in May. U.S employers added a seasonally adjusted 38,ooo jobs in May — the worst monthly performance since September 2010, when the economy shed jobs. The forecast by economists was for an increase of 158,000, so these numbers were a big disappointment. Over the last three months, employment growth has averaged 116,000 —a major slowdown from the 210,000 average during the past 12 months.

However, some 31,500 Verizon Communications Inc. workers went on strike last month in a labor dispute that affected the numbers. Verizon has reached a deal with the union, and workers have returned to their jobs. If the contract is ratified, the June employment report should look better.

The unemployment rate was 4.7% which means that 7.4 million Americans who wanted a job were out of luck — but it meant that more people were dropping out of the workforce. The underemployment rate, people looking for work, stuck in part time jobs or who have been discouraged  about finding a job held steady at 9.7% for May. But the share of Americans who were actually participating in the workforce fell to 62.6%. Here’s the full report from the Wall Street Journal + lots of charts if you prefer a visual.