Daily Archives: October 14, 2011
Brian Micklethwait, over at Samizdata, posted this picture. It’s a bank note from Zimbabwe. It has a pretty high face value: fifty trillion dollars. If you’d like one, you’ll have to shell out three bucks or so in US dollars to get it.
Currently, that comes out to an exchange rate of about Z$16.67 trilion to the dollar. That’s pretty unreasonable, by any stretch of the imagination, if you’re a Zimbabwean. But you know what would be worse? An exchange ratio of 1:1.
And I’m still not fully convinced it won’t happen.
We’ve come a long way baby:
As the New York Times reported September 5, “For General Motors and the Obama administration, the new Chevrolet Volt plug-in hybrid represents the automotive future, the culmination of decades of high-tech research financed partly with federal dollars.”
Decades of research. Yield? 40 miles on a battery charge.
Meet the Roberts electric car. Built in 1896, it gets a solid 40 miles to the charge — exactly the mileage Chevrolet advertises for the Volt — the much-touted $31,645 electric car General Motors CEO Dan Akerson called “not a step forward, but a leap forward.”
The executives at Chevrolet can rest easy for now. Since the Roberts was constructed in an age before Henry Ford’s mass production, the 115-year-old electric car is one of a kind.
What a leap, no?
Yeah, I know, the Volt is much heavier, yatta, yatta, yatta. But seriously, if it was really a “leap forward” and the “culmination of decades of high-tech research”, why does it get the same per charge mileage as a car 115 years old?
I mean maybe I have a higher standard for things described as a “leap forward” and perhaps I expect too much from the “culmination of decades of high-tech research”, but 40 miles a charge? Come on.
So why didn’t the Roberts catch on then? Well, the market said “no”:
If you didn’t know there are electric cars as old as the Roberts, you aren’t alone. Prior to today’s battle of electric v. gas, there was another battle: Electric v. gas v. steam. This contest was fought in the market place, and history shows gas gave electric and steam an even more thorough whooping than Coca-Cola gave Moxie.
Now, of course, we find that the market isn’t to be trusted and government knows best – thus the “leap forward” (sound familiar to anyone?) and the brutally poor sales of the Chevy Volt.
Yes, friend, you’ve got it. We’re again seeing the government – which knows best – picking winners and losers. Except, as usual, the government’s winner is a loser.
Can you say Solyndra?
Sure you can.
Today’s economic statistical releases:
Retail sales in September were much stronger than expected, rising 1.1%, and 0.6% less autos.
Export prices were up 0.4% last month, while import prices rose by 0.3%. On a year-over-year basis, import prices rose 13.4%, while export prices rose 9.5%.
Despite strong retail sales, consumer sentiment continued to slide last month, with the index dropping to 57.5.
Business inventories rose 0.5% August, in line with sales, while the stock-to-sales ratio remained unchanged at 1.28.
Rep. Keith Ellison, a Democrat member of the House from MN, explained why he thought creating more and more regulations was a good idea. You see, the more you pass, the more people businesses have to hire to comply with them, per Ellison:
"I think the answer is no," Ellison said when asked if he believes regulations kill jobs. "And here is why: When we talked about increasing fuel efficiency standards, the industry responded, and they need engineers and designers and manufacturers, and they need actually more people to help respond to the new requirement."
"I believe if the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine. I understand what you mean, because if anything adds a cost to a business, you could assume that that will diminish that business’s ability to hire. But I don’t think that’s actually right. I think what businesses want is customers and what — if they are selling product, if they have a product to sell they will do well even if they have some new regulations to meet," the Congressman said.
The economic ignorance in that statement is dumbfounding. The man obviously has no idea of what productive vs. non-productive work entails. Bureaucrats don’t “produce” anything but cost. They impose a cost burden that the producer must pass on or eat.
Most producers choose to pass on the cost burden in the price of what they produce (it obviously depends on the competitiveness of the market, profit margins, etc.). So in essence, every new regulation that imposes a compliance cost on a producer means those who consume the product end up paying the compliance cost in the price of the product at some point or another. And the man hours that could have been used in a productive job are wasted in seeking compliance with bureaucratic regulation.
These are the guys in Washington DC making decisions about your future. They’re deciding what portion of what you earn you should be allowed to keep. And they have no idea of what makes an economy run.
Here’s a representative that figures a job is a job. And he actually thinks he’s creating jobs what will benefit the economy by increasing regulation and bureaucracy.
Unfortunately his type are more prevalent that you might imagine. And our present situation is beyond their understanding. How does one go on a national television network and make statements like that and think they’re being profound when in fact what they say is profoundly ignorant? He obviously doesn’t know that. That’s just scary.
When all is said and done about our current situation, when the hindsight evaluations are made and the scope of the disaster is understood, it will be clear that people like Rep. Keith Ellison were as responsible as anyone for our economy’s inability to recover.
And he won’t even know it.
This is so “Econ 101” I’m surprised it has to be stated out loud, but of course it does because the Democrats insist on raising taxes now. Bill Clinton, for heaven sake, on the David Letterman show last night:
“Should you raise taxes on anybody right today — rich or poor or middle class? No, because there’s no growth in the economy,” Clinton said on the “Late Show.” “Should those of us who make more money and are in better position to contribute to America’s public needs and getting this deficit under control pay a higher tax rate when the economy recovers? Yes, that’s what I think.”
I disagree with his final bit of collectivist nonsense, but his point about raising taxes now is simply common sense, something which seems to be in short supply on the left these days.
Look, the problem isn’t one of revenue, it’s a problem of spending. More revenue won’t solve the problem. It may slow the debt accumulation a bit, but until these yahoos face up to the fact that the rich aren’t the problem -they are -we’re going to see the same spending patterns that have gotten us into the mess we’re in now.
Like it or not, soaking the rich for more taxes won’t change a thing in terms of debt unless Congress kicks the spending habit and restores fiscal sanity. This class warfare meme the Democrats are running is just another version of kicking the can down the road because they want to spend just like the old days.
This nonsense is directly out of Karl Marx’s “‘Critique of the Gotha Program” which outlines this deadly principle of socialism – “From each according to his ability, to each according to his need.”
We continue to be told we’re not a socialist nation and we’re not headed in that direction, but observation and listening to what certain politicians say gives lie to that claim. The first part of the Clinton quote may be “Econ 101”, but the second part is “Marxism 101”.
We need to quit tiptoeing around and call it what it is.