American Elephants

How Do We Fix The Economy? Let’s Outlaw Profit! by The Elephant's Child

The world’s manufacturers have fallen back into recession.  A key gauge of factory output shrank in August to its lowest point since July 2009 — to 49.6.  A reading below 50 is considered recessionary and the index has been below that key level three months in a row. The reason is the U.S. manufacturing sector.

Manufacturing  is mostly done by small to midsize companies, but due to a raft of new regulations under Dodd-Frank financial reforms, those businesses are struggling to get financing. But if they do get funds — under ObamaCare any company with more than 50 employees will pay steep penalties to insure its workers. So many will put off new investments and curb hiring plans to avoid higher costs. And they don’t know what other regulations may be coming down the pike. In Obama’s first term, manufacturers were hit with an average of 72 new regulations a year, an increase of 60% from the Bush era.

In this sluggish economy, factory output remains 4.7% below where it was when we entered the recession.

The United States took the top spot in the WEF’s Global Competitiveness Report as recently as 2007 and 200, but dropped to 2nd place in 2009, and now we have dropped to 7th place.  The business community is critical toward public and private institutions, and it’s trust in politicians is not strong (54th). Business leaders remain concerned about the government’s ability to maintain arm’s-length relationships with the private sector (59th) and consider that the government spends its resources relatively wastefully (76th). A lack of macroeconomic stability is the country’s greatest area of weakness (111th, down from 90th last year). We do beat Portugal though. The U.S. is 76th in the burden of government regulation behind Kenya and Thailand.

Here’s one reason why we find ourselves in this position. Peter Schiff posed as an anti-business crusader, and found a significant number of DNC delegates and attendees who support explicitly outlawing profit.  These are not the occupy people camping outside, but Democrats at their own convention.

Schiff is CEO of Euro Pacific Capital Inc, a broker-dealer in Westport, CT, and Euro Pacific Precious Metals LLC, a gold and silver dealer based in New York.

If people don’t have the most basic understanding of how the world works, no wonder…

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