American Elephants


I Can’t Believe They Released This Video! Ouch! by The Elephant's Child

You may have seen this excerpt from Hillary’s speech to a labor union group. It’s not one of her finer moments, but the attention all goes to her harsh yelling, and not to what she is saying. Of course she is opposed to “Right to Work” laws. Democrats depend on generous donations from labor unions made possible by forced unionization and forced dues. Democrats have always been far more interested in big donations than in individual freedom. Here’s Robert Barro, a professor of economics at Harvard and a senior fellow at the Hoover Institution:

Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion. For a teachers union, collective bargaining means that suppliers of teacher services to all public school systems in a state—or even across states—can collude with regard to acceptable wages, benefits and working conditions. An analogy for business would be for all providers of airline transportation to assemble to fix ticket prices, capacity and so on. From this perspective, collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty. …

Here’s James Sherk, Senior Policy Analyst in Labor Economics, the Heritage Foundation, testimony to the Wisconsin Senate Committee on Labor and Government Reform, last year before Wisconsin’s passage of Right to Work Laws:

Research confirms that unions pay more attention to their members in right-to-work states. Union officers earn substantially greater salaries in states with compulsory dues, even after adjusting for costs of living. When union officers must earn workers’ support they spend less money on themselves. …

Right-to-work laws have economic benefits that go beyond protecting workers’ freedom. Union contracts make businesses less competitive. One recent study compared companies whose workers narrowly voted to unionize with those who narrowly voted against unionizing. It found the unionized firms were 10 percentage points more likely to go out of businesses within seven years.

Here’s a paper from the Competitive Enterprise Institute, explaining the changing nature of work, and regulatory barriers to success.

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The facts of economics or the way things really work are often counter-intuitive — Hillary shouts that Right to Work is “wrong for workers and wrong for America,” but that is Democrats usual emotional response, and the basis on which they control and regulate. Financial support trumps the concerns of ordinary workers every time. Workers and businesses do far better in Right to Work states, as does the state’s economy.  Right to Work laws do not prevent anyone who wants to belong to a union from belonging — it only prevents unions from forcing membership and expensive dues upon anyone who does not wish to join. Usually thought of as free choice, or free people.

Public sector unions are even more pernicious, for the people who have to pay for higher demands and benefits are the taxpayers, yet they have no say at all in the bargaining process, and politicians who benefit from union support and money aren’t, as you may have noticed, all that careful with taxpayer money.



When You Don’t Understand the Economy, You’re Not Apt to Provide Correct Solutions! by The Elephant's Child

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When the economy seems dismal, and nothing seems to be going right, you may have noticed that reasons start appearing why we just have to settle for a less prosperous world. Obama’s answers in his speech to the UN General Assembly are particularly interesting. We have to make the global economy work better for all people, not just those at the top. Open markets and  capitalism have raised standards of living around the globe, but globalization and rapid progress and technology have weakened the position of workers and their ability to secure a decent wage. Unions have been undermined and manufacturing jobs have disappeared. Here’s Obama:

But I do believe there’s another path — one that fuels growth and innovation, and offers the clearest route to individual opportunity and national success.  It does not require succumbing to a soulless capitalism that benefits only the few, but rather recognizes that economies are more successful when we close the gap between rich and poor, and growth is broadly based. And that means respecting the rights of workers so they can organize into independent unions and earn a living wage.  It means investing in our people — their skills, their education, their capacity to take an idea and turn it into a business.  It means strengthening the safety net that protects our people from hardship and allows them to take more risks — to look for a new job, or start a new venture.

Forgive me, but this is pure claptrap. “Soulless Capitalism” indeed. That benefits only a few? Too much time going to Socialist meetings, and a deep ignorance of basic economics. Robert Barro, professor of economics at Harvard and a visiting scholar at the American Enterprise Institute corrected the president:

The Obama administration and some economists argue that the recovery since the Great Recession ended in 2009 has been unusually weak because of the recession’s severity and the fact that it was accompanied by a major financial crisis. Yet in a recent study of economic downturns in the U.S. and elsewhere since 1870, economist Tao Jin and I found that historically the opposite has been true. Empirically, the growth rate during a recovery relates positively to the magnitude of decline during the downturn, economist Tao Jin and I found that historically the opposite has been true. …

On average, during a recovery, an economy recoups about half the GDP lost during the downturn. The recovery is typically quick, with an average duration around two years. For example, a 4% decline in per capita GDP during a contraction predicts subsequent recovery of 2%, implying 1% per year higher growth than normal during the recovery. Hence, the growth rate of U.S. per capita GDP from 2009 to 2011 should have been around 3% per year, rather than the 1.5% that materialized.

The Left is burdened with the ideas that things need be done by government, that those in government (themselves) know better how to manage businesses and direct trade, and decide what needs to be done in the future. They are so filled with themselves and their self-admiration that they cannot conceive of letting people be free to pursue their own ideas and ambitions. Yet this is the very way you welcome growth and invention. Economist Dierdre McCloskey points out that:

“two centuries ago, the average world income per human (in present-day prices) was about $3 a day. It had been so since we lived in caves. Now it is $33 a day—which is Brazil’s current level and the level of the U.S. in 1940. Over the past 200 years, the average real income per person—including even such present-day tragedies as Chad and North Korea—has grown by a factor of 10. It is stunning. In countries that adopted trade and economic betterment wholeheartedly, like Japan, Sweden and the U.S., it is more like a factor of 30—even more stunning.”…

Over the past 200 years, the average real income per person—including even such present-day tragedies as Chad and North Korea—has grown by a factor of 10. It is stunning. In countries that adopted trade and economic betterment wholeheartedly, like Japan, Sweden and the U.S., it is more like a factor of 30—even more stunning.

The capital became productive because of ideas for betterment—ideas enacted by a country carpenter or a boy telegrapher or a teenage Seattle computer whiz. As Matt Ridley put it in his book “The Rational Optimist” (2010), what happened over the past two centuries is that “ideas started having sex.” The idea of a railroad was a coupling of high-pressure steam engines with cars running on coal-mining rails. The idea for a lawn mower coupled a miniature gasoline engine with a miniature mechanical reaper. And so on, through every imaginable sort of invention. The coupling of ideas in the heads of the common people yielded an explosion of betterments.

Another article by Dierdre McCloskey covering many of the same ideas is available at The New York Times. Both may be behind subscription barriers, but you can find them on Google. It’s worth trying to track them down.  I love Matt Ridley’s brilliant description of  “ideas having sex.” But that’s how it works. You suddenly put two ideas previously unconnected— together and suddenly you have a new and different thing. And it’s how people and nations get rich as well.



“Obama’s Last Lecture” by The Elephant's Child

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President Obama delivered his final address to the U.N General assembly on Tuesday. I listened to a bit online, and decided to get the transcript, as I prefer to read it unadulterated. The Wall Street Journal headline over their commentary was “Obama’s Last Lecture,” and my immediate response was “Please God, Make It So.” President Obama started right off to tell the delegates just what an impressive difference he had made in the world and how very important it was. As  usual, it was all about him.

From the depths of the greatest financial crisis of our time, we coordinated our response to avoid further catastrophe and return the global economy to growth.  We’ve taken away terrorist safe havens, strengthened the nonproliferation regime, resolved the Iranian nuclear issue through diplomacy.  We opened relations with Cuba, helped Colombia end Latin America’s longest war, and we welcome a democratically elected leader of Myanmar to this Assembly.  Our assistance is helping people feed themselves, care for the sick, power communities across Africa, and promote models of development rather than dependence.  And we have made international institutions like the World Bank and the International Monetary Fund more representative, while establishing a framework to protect our planet from the ravages of climate change.

This is important work.  It has made a real difference in the lives of our people.  And it could not have happened had we not worked together.  And yet, around the globe we are seeing the same forces of global integration that have made us interdependent also expose deep fault lines in the existing international order.

We see it in the headlines every day.  Around the world, refugees flow across borders in flight from brutal conflict.  Financial disruptions continue to weigh upon our workers and entire communities.  Across vast swaths of the Middle East, basic security, basic order has broken down.  We see too many governments muzzling journalists, and quashing dissent, and censoring the flow of information.  Terrorist networks use social media to prey upon the minds of our youth, endangering open societies and spurring anger against innocent immigrants and Muslims.  Powerful nations contest the constraints placed on them by international law.

He hit all his favorite progressive notes: inequality, the one percent controlling all the wealth, beggar thy neighbors policies, injustice undermining people’s faith in the system, soulless capitalism,  the gap between rich and poor, and I loved this one: “with further investment in infrastructure and early childhood education and basic research, I’m confident that such progress will continue.” About infrastructure, remember there weren’t any shovel-ready jobs. It has been a dismal eight years, with no real recovery, an economy never reaching even a basic 3% growth, an economy burdened by excessive regulation, overreaching controls, and of course the constant pursuit of some way, any way, to stop the normal warming and cooling of our planet, on which he has squandered billions to no avail whatsoever.

On the other hand he’s for democracy, our democratic Constitution, our Bill of Rights and the ideals which let our ordinary  people organize and march and protest.  The American narrative, I guess. It was a lecture.

The speech is here if you want to read it.



Can the Government Really Run the Economy? Steve Forbes by The Elephant's Child



Historical Minimum Wage Math from Economist Mark Perry by The Elephant's Child
September 20, 2016, 12:26 pm
Filed under: Bureaucracy, Capitalism, Domestic Policy, Economy, Unemployment

“Historically, firms finance increases in the minimum wage
by laying off minimum wage workers.”

Mark Perry
4/11/2016

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About International Trade: by The Elephant's Child

 

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From economist Mark Perry st AEI: The quotation of the day on international trade comes from President Ronald Reagan’s radio address to the nation on international trade on August 6, 1983:

The winds and waters of commerce carry opportunities that help nations grow and bring citizens of the world closer together. Put simply, increased trade spells more jobs, higher earnings, better products, less inflation, and cooperation over confrontation. The freer the flow of world trade, the stronger the tides for economic progress and peace among nations.

I’ve seen in my lifetime what happens when leaders forget these timeless principles. They seek to protect industries and jobs, but they end up doing the opposite. One economic lesson of the 1930s is protectionism increases international tensions. We bought less from our trading partners, but then they bought less from us. Economic growth dried up. World trade contracted by over 60 percent, and we had the Great Depression.



Happy Constitution Day! by The Elephant's Child

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Today is Constitution Day, September 17, celebrating the ratification of the United States Constitution on September 17, 1787.  If you are unfamiliar with the day of celebration, you may be forgiven, for it was only established in 2004, and to further confuse matters, if it occurs on a weekend it is celebrated in schools and government offices on the closest weekday, so they supposedly celebrated yesterday. Check with your child if you have one in school.

The law establishing the American federal observance was created with an amendment by Senator Robert Byrd to the Omnibus spending bill of 2004, and mandates that all publicly funded educational institutions, and all federal agencies provide educational programming on the history of the American Constitution on September 17, 1787. It is also Citizenship Day, commemorating the coming of age or by naturalization, of those who have become citizens. (What? You’re not a citizen until you turn 18?)

Iowa schools started celebrating in 1911, and there’s a long history of attempts to make it a national celebration, which aren’t really important anyway. What is important is that a recent survey determined that most college students had no idea who James Madison was, or why he was important. And were astonished to learn that slavery was not practiced only in the United States. No idea of Muslim raids on the British Isles to capture British slaves, or of Muslim slave traders caravans up from ‘darkest Africa’, nor of  American Indian slaves. Schools across the country have become very lax in the teaching of American History. And our college students have no idea why the Constitution is a big deal. Oddly enough, the institution that makes the most of American history and the study of the Constitution is Hillsdale College, which receives no federal funding at all. Here is Dr. Larry  P. Arn, President of Hillsdale College explaining why they study the Constitution.




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