American Elephants

Explaining Capitalism Once Again. by The Elephant's Child

John Mackey, co-founder of Whole Foods, explains to Reason TV’s Nick Gillespie just why Intellectuals hate Capitalism. “Intellectuals have always disdained commerce” he says. “They have always sided…with the aristocrats to maintain a society were the business people were kind of kept down.” (This is a 2015 conversation, but good on capitalism)

I’ll just add Roger Kimball’s excellent take once again.

Here’s the bottom line: Capitalism is the greatest engine for the production of wealth the ingenuity of man has ever invented. Are you interested in helping the poor? Embrace capitalism. Do you want to help clean up the environment? Embrace capitalism. Are you interested in obliterating the scourge of malnutrition in some ghastly African disease, or illiteracy, embrace capitalism. The global poverty rate, Kevin reminds us, has been cut in half in the last 20 years. Think about that. Then think about that. Then think about the sorrowful history of our species up to about 1830. How much progress against widespread—really, near total—poverty had been there from the beginning of time until then—until, that is capitalism started to take off? Not much


Why Intellectuals Hate Capitalism by The Elephant's Child

John Mackey, CEO of Whole Foods explains why Intellectuals hate Capitalism. Professors at our Universities have long seethed with envy when they see the published income of corporate CEOs. After all, they have PhDs, it is their ability to pass on real knowledge that made these upstarts able to become corporate big shots. If you wondered why college tuition has so far eclipsed any rise in the economy, part of it is the demands of professors to receive what they believe to be their due emolument. This video is from August 2015, pre-Amazon, but illuminating nevertheless. It explains a lot.

The American Economy Shrank by 0.7 Percent in The First Quarter. by The Elephant's Child
May 29, 2015, 10:49 pm
Filed under: Economy | Tags: , , ,

The revised figures for the first quarter show that the American economy shrank by 0.7 percent — January through March. The administration did not, however try to blame it on Bush, they blamed it on the harsh winter. It was a brutal winter on the east coast and in the Midwest. It is the third quarter in which the economy has actually contracted (the other two were the first quarters of 2011 and 2014).

This has been the slowest, most sluggish recovery since World War II. The strong dollar has meant that American exports are down. but other economies are not healthy either, including China’s. The Obama administration’s big-government, big-deficit, big waste and big-regulation policies are not a recipe for growth or recovery.

A new study finds that overhead costs are exploding under ObamaCare. Another promise up in smoke. The Health Affairs Blog published a study based on numbers from the Centers for Medicare and Medicaid Services, the agency that runs ObamaCare and found that ObamaCare increased health care costs by $17 billion last year, and by 2020 will add a total of more than $270 billion.Twenty-two percent of all new spending is going to overhead, paperwork, not patient care.

The United States spends more on regulation than ever before. The amount spent has increased significantly as has the number of people who are employed to write and enforce the increasing number of government regulations. In 1990, total spending on regulatory activity was $20.6 billion. This year it will clock in at $60.1 billion, a 192% increase. The National Association of Manufacturers estimates that in 2012 the total cost of federal regulations was just over $2 trillion — 13 5 of that year’s GDP.

Is this unruly Americans who need more careful control? Not likely. It is an administration that sees power and control as a goal. Not a climate in which free enterprise can prosper.

Myth, Lies And Capitalism by The Elephant's Child
May 29, 2015, 6:24 am
Filed under: Capitalism, Freedom | Tags: , ,

Arthur Brooks, President of the American Enterprise Institute, economist, and french horn player, gives a short class in Capitalism, always a worthy endeavor. Free enterprise works to lift people all over the world out of poverty.

Is Free Market Capitalism Morally Superior? Of Course! by The Elephant's Child

Economist Walter Williams has a special genius for explaining complicated things in simple terms. He is a renowned Professor of Economics at George Mason University, and in this interview he takes on the free market. Good video to share with your high school and college students.

The Richest One Percent in the World by The Elephant's Child

                                                                                 (click to enlarge)

If you made as much as $34,000 last year, you are now part of the world’s richest 1%.

World Bank economist Branko Milanovic puts it all in perspective:

The true global middle class, falls far short of owning a home, having a car in a driveway, saving for retirement and sending their kids to college. In fact, people at the world’s true middle — as defined by median income — live on just $1,225 a year. (And, yes, Milanovic’s numbers are adjusted to account for different costs of living across the globe.)

In the grand scheme of things, even the poorest 5% of Americans are better off financially than two thirds of the entire world.

Each one of those little human figures represents one million people. Just something to think about.

(h/t: Neatorama)

Capitalism May Be Messy, But It’s Way Better Than the Alternative. by The Elephant's Child
November 4, 2011, 7:12 am
Filed under: Capitalism, Economy, Freedom, Health Care | Tags: , ,

The Occupy people have been attacking Capitalism as the evil that has made them take out more student loans than they can afford and then refusing them the high level jobs that they feel their education entitles them to. They seem rather fuzzy on just what Capitalism is, but they are quite sure they don’t like it, along with big banks.

“Capitalism” is simply the name that Karl Marx gave to the natural workings of the free market. Governments are established among men to attempt to mess up the natural workings of the free market, or so it would seem. Economics is the study of the use of scarce resources which have alternative uses.  Or you can’t always have what you want. I want a brand new Mercedes-Benz. I can’t have one. The signal that tells me so is the price. But the price is not just an obstacle that keeps me from getting what I want, it is a signal.  There aren’t nearly enough Mercedes so everyone can have one.  How they get distributed is sorted out by price. It forces me to consider how my available funds should be allocated.

Governments, whose nature is to mess up the natural workings of the free market, having power over the laws in society and wanting to get reelected, often stick their noses where they do not belong. Case in point — there is a major and growing shortage of lifesaving drugs, particularly therapies for cancer.

Shortages, according to the Wall Street Journal, have more than tripled since 2005.  By the end of this year, more than 300 products are apt to be back-ordered, in short supply or unavailable. Some are pain medicines, some are emergency drugs but most are what are called “sterile injectables,” mainstays of chemotherapy programs.  This class has mostly been off-patent for decades, but production is complicated, and demanding. George W. Bush and the Republican majority decided that Medicare was “overpaying” for these cancer drugs, and put a 6% cap on price increases in the 2003 drug bill.  These new price controls took effect in 2005 — when the shortages began.

Central planning always produces scarcity. The drugs that are in short supply currently sell for an average $37.88 a dose, and modest price increases could clear the market. The Food and Drug Administration rules cause pointless delays. It can take up to 2½ years to get FDA approval for a generic, so other companies can’t ramp up production if manufacture is delayed or a company cancels a product line because of these disincentives.

This week the Obama administration confronted the problem, but decided to put its executive order in with its “we can’t wait” campaign against House Republicans. All very nice, but the only fix is — something liberals hate— market prices. When prices rise because a product is scarce, that calls forth more production, which eventually helps the price to drop.  That’s what prices do. They are a signal. It is an imperfect signal, but it beats a bunch of politicians.

The real danger is, of course, to patients who don’t receive the drugs they need. The delay is actually killing people. Rather than allow the market to work, Mr. Obama has ordered the Justice Department to crack down on the grey markets that have sprung up to deliver supplies to doctors and hospitals, with the inevitable markup.  This is further interference in the market which will only further distort the market, and leave more patients without the medicines they need.

Mr. Obama’s executive order requires firms to give advance notice when they believe that a drug may become scarce. This is an incentive for hospitals or market middlemen to buy up remaining supplies. The president blames the scarcity of manufacturers on slim profit margins, which misses the point that the problem is government price controls.  Generic makers are choosing to quit a product line rather than invest money to meet ever higher standards.

The problem with ObamaCare and all socialized medicine schemes is that the goal becomes keeping costs down, for those who are running the system; and for the suppliers the goal becomes how to get sufficient reimbursement from the system. This is why administrators proliferate in, for example, NHS in Britain.  You need more watchdogs to control the costs, and the poor patients get lost in the shuffle.

Capitalism is messy, free markets are imperfect, and life really isn’t fair just like your mother said; but capitalism remains the best system ever devised to allow people to fulfill the opportunity that life offers. Or, if you like eating grass and bark, you could try the Peoples’ Republic of Korea.

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