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Posts Tagged ‘economics’

A journalist snuck into Cuba without saying he is a journalist, and came back with these observations.

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Michael Avramovich provides some details in The Sequester: National Catastrophe or Much Ado About Nothing? at Mere Comments.

At Townhall, Daniel J. Mitchell would like for the New York Times to show him the “deep cuts” they keep writing about:

Sigh. I feel like a modern-day Sisyphus. Except I’m not pushing a rock up a hill, only to then watch it roll back down.

I have a far more frustrating job. I have to read the same nonsense day after day about “deep spending cuts” even though I keep explaining to journalists that a sequester merely means that spending climbs by $2.4 trillion over the next 10 years rather than $2.5 trillion.

He includes a graph, to make it even more plain what he’s talking about.

Then there’s the Michael Ramirez cartoon that compares the 2007 federal budget with the 2013 federal budget, using pie charts.

I think I’m starting to get the picture.

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From the 1879 novel Rudder Grange, by Frank R. Stockton:

Euphemia and I once wrote a book,—this was just before we were married,—in which we told young married people how to go to housekeeping and how much it would cost them. We knew all about it, for we had asked several people. Now the prices demanded as yearly rental for small furnished houses, by the owners and agents of whom I have been speaking, were, in many cases, more than we had stated a house could be bought and furnished for!

[…snip…]

There was one man who offered us a house that almost suited us. It was near the water, had rooms enough, and some—but not very much—ground, and was very accessible to the city. The rent, too, was quite reasonable. But the house was unfurnished. The agent, however, did not think that this would present any obstacle to our taking it. He was sure that the owner would furnish it if we paid him ten per cent, on the value of the furniture he put into it. We agreed that if the landlord would do this and let us furnish the house according to the plans laid down in our book, that we would take the house. But unfortunately this arrangement did not suit the landlord, although he was in the habit of furnishing houses for tenants and charging them ten per cent. on the cost.

I saw him myself and talked to him about it.

“But you see,” said he, when I had shown him our list of articles necessary for the furnishing of a house, “it would not pay me to buy all these things, and rent them out to you. If you only wanted heavy furniture, which would last for years, the plan would answer, but you want everything. I believe the small conveniences you have on this list come to more money than the furniture and carpets.”

“Oh, yes,” said I. “We are not so very particular about furniture and carpets, but these little conveniences are the things that make housekeeping pleasant, and,—speaking from a common-sense point of view,—profitable.”

“That may be,” he answered, “but I can’t afford to make matters pleasant and profitable for you in that way. Now, then, let us look at one or two particulars. Here, on your list, is an ice-pick: twenty-five cents. Now, if I buy that ice-pick and rent it to you at two and a-half cents a year, I shall not get my money back unless it lasts you ten years. And even then, as it is not probable that I can sell that ice-pick after you have used it for ten years, I shall have made nothing at all by my bargain. And there are other things in that list, such as feather-dusters and lamp-chimneys, that couldn’t possibly last ten years. Don’t you see my position?”

I saw it. We did not get that furnished house. Euphemia was greatly disappointed.

“It would have been just splendid,” she said, “to have taken our book and have ordered all these things at the stores, one after another, without even being obliged to ask the price.”

I had my private doubts in regard to this matter of price. I am afraid that Euphemia generally set down the lowest price and the best things. She did not mean to mislead, and her plan certainly made our book attractive. But it did not work very well in practice. We have a friend who undertook to furnish her house by our book, and she never could get the things as cheaply as we had them quoted.

“But you see,” said Euphemia, to her, “we had to put them down at very low prices, because the model house we speak of in the book is to be entirely furnished for just so much.”

But, in spite of this explanation, the lady was not satisfied.

We found ourselves obliged to give up the idea of a furnished house. We would have taken an unfurnished one and furnished it ourselves, but we had not money enough. We were dreadfully afraid that we should have to continue to board.

It was now getting on toward summer, at least there was only a part of a month of spring left, and whenever I could get off from my business Euphemia and I made little excursions into the country round about the city. One afternoon we went up the river, and there we saw a sight that transfixed us, as it were. On the bank, a mile or so above the city, stood a canal-boat. I say stood, because it was so firmly imbedded in the ground by the river-side, that it would have been almost as impossible to move it as to have turned the Sphinx around. This boat we soon found was inhabited by an oyster-man and his family. They had lived there for many years and were really doing quite well. The boat was divided, inside, into rooms, and these were papered and painted and nicely furnished. There was a kitchen, a living-room, a parlor and bedrooms. There were all sorts of conveniences—carpets on the floors, pictures, and everything, at least so it seemed to us, to make a home comfortable. This was not all done at once, the oyster-man told me. They had lived there for years and had gradually added this and that until the place was as we saw it. He had an oyster-bed out in the river and he made cider in the winter, but where he got the apples I don’t know. There was really no reason why he should not get rich in time.

Well, we went all over that house and we praised everything so much that the oyster-man’s wife was delighted, and when we had some stewed oysters afterward,—eating them at a little table under a tree near by,—I believe that she picked out the very largest oysters she had, to stew for us. When we had finished our supper and had paid for it, and were going down to take our little boat again,—for we had rowed up the river,—Euphemia stopped and looked around her. Then she clasped her hands and exclaimed in an ecstatic undertone:

“We must have a canal-boat!”

And she never swerved from that determination.

After I had seriously thought over the matter, I could see no good reason against adopting this plan. It would certainly be a cheap method of living, and it would really be housekeeping. I grew more and more in favor of it. After what the oyster-man had done, what might not we do? HE had never written a book on housekeeping, nor, in all probability, had he considered the matter, philosophically, for one moment in all his life.

But it was not an easy thing to find a canal-boat. There were none advertised for rent—at least, not for housekeeping purposes.

We made many inquiries and took many a long walk along the water-courses in the vicinity of the city, but all in vain. Of course, we talked a great deal about our project and our friends became greatly interested in it, and, of course, too, they gave us a great deal of advice, but we didn’t mind that. We were philosophical enough to know that you can’t have shad without bones. They were good friends and, by being careful in regard to the advice, it didn’t interfere with our comfort.

We were beginning to be discouraged, at least Euphemia was. Her discouragement is like water-cresses, it generally comes up in a very short time after she sows her wishes. But then it withers away rapidly, which is a comfort. One evening we were sitting, rather disconsolately, in our room, and I was reading out the advertisements of country board in a newspaper, when in rushed Dr. Heare—one of our old friends. He was so full of something that he had to say that he didn’t even ask us how we were. In fact, he didn’t appear to want to know.

“I tell you what it is,” said he, “I have found just the very thing you want.”

“A canal-boat?” I cried.

“Yes,” said he, “a canal-boat.”

“Furnished?” asked Euphemia, her eyes glistening.

“Well, no,” answered the doctor, “I don’t think you could expect that.”

“But we can’t live on the bare floor,” said Euphemia; “our house MUST be furnished.”

“Well, then, I suppose this won’t do,” said the doctor, ruefully, “for there isn’t so much as a boot-jack in it. It has most things that are necessary for a boat, but it hasn’t anything that you could call house-furniture; but, dear me, I should think you could furnish it very cheaply and comfortably out of your book.”

“Very true,” said Euphemia, “if we could pick out the cheapest things and then get some folks to buy a lot of the books.”

“We could begin with very little,” said I, trying hard to keep calm.

“Certainly,” said the doctor, “you need make no more rooms, at first, than you could furnish.”

“Then there are no rooms,” said Euphemia.

“No, there is nothing but one vast apartment extending from stem to stern.”

“Won’t it be glorious!” said Euphemia to me. “We can first make a kitchen, and then a dining-room, and a bedroom, and then a parlor—just in the order in which our book says they ought to be furnished.”

“Glorious!” I cried, no longer able to contain my enthusiasm; “I should think so. Doctor, where is this canal-boat?”

The doctor then went into a detailed statement. The boat was stranded on the shore of the Scoldsbury river not far below Ginx’s. We knew where Ginx’s was, because we had spent a very happy day there, during our honeymoon.

The boat was a good one, but superannuated. That, however, did not interfere with its usefulness as a dwelling. We could get it—the doctor had seen the owner—for a small sum per annum, and here was positively no end to its capabilities.

We sat up until twenty minutes past two, talking about that house. We ceased to call it a boat at about a quarter of eleven.

The next day I “took” the boat and paid a month’s rent in advance. Three days afterward we moved into it.

We had not much to move, which was a comfort, looking at it from one point of view. A carpenter had put up two partitions in it which made three rooms—a kitchen, a dining-room and a very long bedroom, which was to be cut up into a parlor, study, spare-room, etc., as soon as circumstances should allow, or my salary should be raised. Originally, all the doors and windows were in the roof, so to speak, but our landlord allowed us to make as many windows to the side of the boat as we pleased, provided we gave him the wood we cut out. It saved him trouble, he said, but I did not understand him at the time. Accordingly, the carpenter made several windows for us, and put in sashes, which opened on hinges like the hasp of a trunk. Our furniture did not amount to much, at first. The very thought of living in this independent, romantic way was so delightful, Euphemia said, that furniture seemed a mere secondary matter.

We were obliged indeed to give up the idea of following the plan detailed in our book, because we hadn’t the sum upon which the furnishing of a small house was therein based.

“And if we haven’t the money,” remarked Euphemia, “it would be of no earthly use to look at the book. It would only make us doubt our own calculations. You might as well try to make brick without mortar, as the children of Israel did.”

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John Hinderaker shares good news out of North and South Dakota. (If for no other reason, follow the link to take a look at the photos of a children’s hospital built to look like a castle.)

hat tip: Jack Niewold (Facebook)

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An oldie but goodie: I, Pencil, by Leonard E. Read (1898-1983), originally published in the December 1958 issue of The Freeman.

hat tip: Paul Mitchell (on Facebook).

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…explained. (Perhaps I should say “illustrated”.)

See also the post at Iowahawk that was used as reference in the above video: Feed Your Family on $10 Billion a Day.

hat tip: Scott Ott’s Facebook page.

 

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There are reasons to think not, according to Union Chutzpah by Julie Ponzi, and Union Myths, by Thomas Sowell.

As both authors point out, there are added problems when you have public sector unions.

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Scott Johnson at PowerLine takes note of a new book about policies leading to the economic crash. HarperCollins has more info here.

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I have been leading something of a double life lately. I have been making severe edits in a novel I wrote before I converted to Christianity. It was too long, and a bit too complicated. And did I mention that I wrote it before I converted to Christianity?

But I have also been pumping gas. I live in Oregon, which forbids self-service. (Oregon can be an extremely embarrassing place to live.) Oregon has also jacked the minimum wage and other costs of doing business to the point that a small gas station cannot afford to have employees during all hours of operation. (Did I mention that Oregon can be a difficult and embarrassing place to live?) We have a bookstore inside a gas station. We cannot afford to have people working for us like we used to be able to afford having people work for us. So I have been braving the weather and getting to know the ingenious designs of gas caps through the ages. This, of course, is not altogether a bad thing, not least because it keeps me from spending too much time just thinking.

Spending too much time just thinking makes it hard to think clearly, I have found.

I am, of course, not the only person to have noticed this.

For instance, Amanda Witt, and Matthew B. Crawford, have some things to say about the value of manual work.

The intellectual who has theorized himself into lala land – and expects the real world to adjust itself accordingly – seems to be a stock character from way back. Likewise, the foolish rich. Likewise… oh, you get the picture. Those who do not do, tend to expect reality to somehow bend when they want it to. (Just like their lackeys do, I guess.)

I like to garden. No matter what I do, I cannot get a seed to sprout before it’s ready. Water proves itself essential. Sun and shade have consequences. Seasons come and go. Whether I like it or not.

Oh, good. Reality doesn’t need mankind in general, or me in particular, to operate.

Considering how much trouble I have with some gas caps, this is probably a very good thing. 🙂

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The January Imprimis had two articles in it, one by Rush Limbaugh, and one by Burton Folsom, Jr., author of New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America. I hadn’t heard of the book before I got the Imprimis, but after reading Folsom’s piece I decided to order a copy.

The first three chapters, I wasn’t sure I was going to get my money’s worth – but then it got really interesting, and eye-opening. Overall, I found it well-written and well-end-noted, and I strongly recommend it for anyone interested in history, government, ethics (or the lack of same), or economics.

Here’s the article that led me to buy the book, reprinted by permission from Imprimis, a publication of Hillsdale College:

Do We Need a New New Deal?

Burton W. Folsom, Jr.
Charles F. Kline Chair in History and Management,Hillsdale College
Author, New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America

The following is adapted from a speech delivered on January 9, 2009, in Washington, D.C., at a seminar sponsored by Hillsdale’s Allan P. Kirby, Jr. Center for Constitutional Studies and Citizenship.

THE NEW Deal has probably been the greatest political force in America during the last 100 years, and Franklin D. Roosevelt has probably been the most influential president during this time. In our current economic crisis—which some have compared with the Great Depression—many critics are calling for more federal programs and a “New New Deal.” There are three reasons we do not need a New New Deal from President Obama in 2009.

First, the federal programs in FDR’s New Deal did not lower unemployment. Sure, the Works Progress Administration built roads, the Tennessee Valley Authority built dams, and the Civilian Conservation Corps planted trees. But every dollar that went to creating a federal job had to come from taxpayers, who, by sending their cash to Washington, lost the chance to buy hamburgers, movie tickets, or clothes and create new jobs for restaurants, theaters, and tailors.

What’s worse, some New Deal programs had terrible unintended consequences. The Agricultural Adjustment Administration, for example, overhauled agriculture by paying farmers not to produce on part of their land. After farmers took the federal dollars, the U.S. developed shortages of the very crops taxpayers were paying farmers not to produce. By 1935, for example, the U.S. was importing almost 35 million bushels of corn, 13 million bushels of wheat, and 36 million pounds of cotton. Simultaneously, we had an army of bureaucrats in the Department of Agriculture to inspect farms (and even to do aerial photography) to ensure farmers were not growing the crops we were importing into the country.

Second, the taxes to pay for the New Deal became astronomical. In 1935, Roosevelt decided to raise the marginal tax rate on top incomes to 79 percent. Later he raised it to 90 percent. These confiscatory rates discouraged entrepreneurs from investing, which prolonged the Great Depression.

Henry Morgenthau, FDR’s loyal Secretary of the Treasury, was frustrated at the persistence of double-digit unemployment throughout the 1930s. In May 1939, with unemployment at 20 percent, he exploded at the failed New Deal programs. “We have tried spending money,” Morgenthau noted. “We are spending more than we have ever spent before and it does not work. . . . We have never made good on our promises. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”

Third, the New Deal divided and politicized the country in tragic ways. Those who lobbied most effectively won subsidies and bailouts even if their cause was weak. Others, who had greater needs, received nothing. Walter Waters, who led a march of veterans on Washington, lobbied successfully for a special bonus for veterans, whether they had been in battle or not. When asked why veterans—instead of longshoremen or teachers—should receive a special bonus of taxpayer dollars, he said, “I noticed, too, that the highly organized lobbies in Washington for special industries were producing results: loans were being granted to their special interests. . . . Personal lobbying paid, regardless of the justice or injustice of their demand.”

Thus, as money became available, those with effective political lobbies won the subsidies and others, who sometimes had more just causes and greater need, received little or nothing. In the case of the veterans, in 1936 they won a $2 billion federal bonus—a sum exceeding six percent of the entire national debt at the time. Teachers, by contrast, were less effective lobbyists and won almost no federal subsidies. Silver miners, led by Senator Key Pittman of Nevada, won a silver subsidy that paid almost $300,000 a day each day for 14 years, but coal miners were left out.

In another example, under Presidents Hoover and Roosevelt, Illinois lobbied effectively and won $55,443,721 under the first federal welfare grant while Massachusetts received zero federal dollars. Without federal money for welfare needs, Massachusetts valiantly raised its own funds to secure what Illinois extracted from Washington. The Boston Civic Symphony repeatedly gave concerts to benefit the jobless. City officials and teachers raised money and took pay cuts. Massachusetts Governor Joseph Ely believed that no state should receive federal aid and that private charity was the best charity; that federal relief ruined both taxpayers and those in need. “Whatever the justification for relief,” Ely said, “the fact remains that the way in which it has been used makes it the greatest political asset on the practical side of party politics ever held by an administration.” Ely added that “millions of men and women . . . have come to believe almost that there is no hope for them except upon a government payroll.”

Federal dollars always become political dollars, and the Democrats moved to use federal money to gain votes at election time. In Pennsylvania, Joseph Guffey, the successful Democratic candidate for U.S. Senate in 1934, ran a campaign ad that said, “Compare this $297,942,173 contributed by Pennsylvania to the U.S. U.S. Treasury with the cash and credit of $678,074,195 contributed to Pennsylvania by the Roosevelt Democratic administration.” Vote Democrat, Guffey and others proclaimed, and the federal faucet will keep running. James Doherty, a New Hampshire Democrat, said, “It is my personal belief that to the victor belong the spoils and that Democrats should be holding most of these [WPA] positions so that we might strengthen our fences for the 1940 election.” One WPA director in New Jersey—a corrupt but candid man—answered his office phone, “Democratic Headquarters.”

If history is a guide, we have every reason to believe that if President Obama institutes a New New Deal, then universal health care, federal bailouts, and jobs stimulus programs will be costly, will be politicized, and will fail.

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