Archive for the ‘Basic Economics’ tag
How many times have you heard a statist claims that government indoctrination centers, or public education to use their euphemism, don’t receive enough money? If I had a nickel for every time I’ve heard that I’d have enough money to fund a government indoctrination center for 15 to 20 minutes!
Statists are predictable creatures. Whenever a government programs fails to deliver expected results they resort to claiming that the program simply didn’t receive enough funding. To them government programs are furnaces. If the program isn’t delivering expected results then you need to shovel more coal into it. But how much money is needed to make the furnace of government indoctrination centers produce some heat? Apparently a lot:
There’s also lots of waste and inefficiency when Uncle Sam gets involved. With great fanfare, President Obama spent buckets of money to supposedly boost government schools. The results were predictably bad.
The administration funneled $7 billion into the program between 2010 and 2015… Arne Duncan, Obama’s education secretary from 2009 to 2016, said his aim was to turn around 1,000 schools every year for five years. ..The school turnaround effort, he told The Washington Post days before he left office in 2016, was arguably the administration’s “biggest bet.”
It was a “bet,” but he used our money. And he lost. Or, to be more accurate, taxpayers lost. And children lost.
Indeed, I’ve seen this movie before. Many times. Bush’s no-bureaucrat-left-behind initiative flopped. Obama’s latest initiative flopped. Common Core also failed. Various schemes at the state level to dump more money into government schools also lead to failure. Local initiatives to spend more don’t lead to good results, either.
Throwing more money into government indoctrination centers is an exercise in doing the same thing over and over again and expecting different results. If shoveling money into the program was capable of fixing it then we’d have see at least some marginal improvement over the decades. But student performance continues to dwindle, the nation is becoming dumber.
Will statists listen to reason on this matter? Of course not. In their world all problems can only be solved by the State. If the State’s current initiatives aren’t working then it’s the fault of a hated political party, the free market, or a lack of funding. But the fault never lies with statism itself!
Donald Trump announced his budget. It’s what you’d expect from a neocon. Money was shuffled from neoliberal favored programs into the military:
Yesterday, the Trump administration released its first proposed budget outline. While this is just the first step in what will inevitably be extensive negotiations with Congress, it gives a clear indication of what Trump’s priorities are. First and foremost, he is focused on the military, which will see a $54 billion increase in spending, offset by cuts or wholesale elimination of programs elsewhere. Science is clearly not a priority, as it is repeatedly targeted for cuts in every agency that funds it.
But those cuts aren’t evenly distributed. NASA’s budget is almost entirely unscathed, although Earth sciences research funded by the agency will be cut to expand funding elsewhere. The National Science Foundation, a major source of grants for fundamental research, isn’t even mentioned, so there’s no sense of how it will fare. And the harshest cuts appear to be directed at biomedical research, which will see a dramatic 20 percent drop in funding for the National Institutes of Health.
As one would expect, the neocons are cheering this increase in military spending while the neoliberals are flipping out because the proposed budget cuts from their beloved science. What they fail to realize is that cutting funding for science would be a good thing for actual science.
Resource misallocation has plagued science for decades. Instead of science that focuses on the market (that would be you and me), companies have been allocating resources for the State’s pet projects in order to obtain government funding (which takes the form of tax dollars stolen from you and me). With less government funding to go around researchers would once again have to rely on the market to decide where resources were allocated. That would mean more research into making better goods and services instead of whatever idiotic pet project some random politician drummed up.
Of course, since the military budget is going up resource misallocation will continue to plagues science. Researchers will continue to focus on the State’s pet projects instead of what the market wants. Those pet projects will merely shift to making more effective methods of blowing shit up. This, of course, will anger the neoliberals because blowing shit up isn’t within their vision of what science ought to be. But the belief that science ought to be one thing or another and dictated by the State is the fundamental error being made here.
Fourth generation, or asymmetrical, warfare is much more reliant on economics than firepower. Instead of attacking an enemy directly, a military practicing fourth generation warfare tries to slowly chip away at its enemy until that enemy loses the ability or will to fight. If, for example, a military can cost their enemy $3 million by spending $200 it’s only a matter of time until their enemy is bankrupt:
A Patriot missile – usually priced at about $3m (£2.5m) – was used to shoot down a small quadcopter drone, according to a US general.
The strike was made by a US ally, Gen David Perkins told a military symposium.
“That quadcopter that cost 200 bucks from Amazon.com did not stand a chance against a Patriot,” he said.
According to the story, the missile was fired by an unspecified United States ally. Perhaps they were given the Patriot launcher for free and therefore aren’t concerned about the cost disparity. But anybody looking at the United States and its allies is probably getting some clever ideas. Sure, it’s unlikely that a Patriot will be used to take down a cheap quadcopter again but the basic idea is pretty solid, cheap drones can lead to an expenditure of expensive military equipment.
If the United States’ allies continue pulling this kind of stunt the country will have to decide whether it will keep handing out expensive toys or not. If not, its allies will be weakened and its enemies will be able to declare a victory. If so, the United States will continue throwing money down a hole until it’s bankrupt, which will cause its enemies to declare victory as well. There’s no winning when you enemy can cost you millions of dollars by spending a couple of hundred dollars.
Minnesotans who aren’t Hall of Fame quarterbacks can still make a play to get in the action for the 2018 Super Bowl.
The Minnesota Host Committee needs 10,000 volunteers to run the event, and the process starts Wednesday with online applications.
Obviously, volunteers don’t get paid, but they do get a complete Super Bowl LII outfit unique to the effort that will include top-grade winter gear, including a parka built to withstand extreme cold, a sturdy backpack, beanie and thermos.
Talk about a sucker’s deal. 10,000 people will provide labor to the National Football League (NFL) and in return they only receive marketed attire that will allow them to act as free walking advertisements in the future. They don’t even receive a free ticket to the event they’re going to bust their asses for. And you know what? The Minnesota Host Committee will get its volunteers. It’ll probably get so many volunteers that it’ll be able to pick and choose who it wants.
To me this demonstrates the sordid state of economic education in this country. Anybody willing to provide free labor to a multibillion dollar organization is a goddamn fool in my book. Especially when you consider the fact that the organization needs workers and would therefore offer some kind of actual compensation if nobody was stupid enough to provide labor for free.
The Foundation for Economic Education posted an excellent article explaining how absurd it would be to run grocery stores like public schools. But the best piece of information in the article is this:
One often hears that education is too important to leave to the whims of the market. Yet food is even more important; it’s a prerequisite before education can be considered. In spite of this, the (relatively) free market in food seems to work quite well.
Consumers get a wide variety at a low cost. Even people that have niche dietary requirements like gluten-free or vegan have products suited to them. And while complaints about the quality of public education are rampant, one rarely hears objections about the quality of the grocery stores. In the latter case, people don’t have to complain; they just take their business to someone who will serve them better.
Education isn’t even possible if one doesn’t have enough food to survive. Yet public education is a sacred cow. If you criticize public education or, worse, advocate for its complete elimination you are going to hear a lot of people accusing you of hating children. However, if you don’t advocate for socializing grocery stores nobody cares. In fact, everybody seems to be fine with grocery stores remaining private.
Don’t get me wrong, I’m glad that grocery stores in the United States are private. If they weren’t they’d operate like the grocery stores in the former Soviet Union or current ones in Venezuela. You’d have to wait in line for hours just to find out that the store doesn’t have anything you need in stock.
Socialism ensure that everybody is equal..ly poor:
In a new sign that Venezuela’s financial crisis is morphing dangerously into a humanitarian one, a new nationwide survey shows that in the past year nearly 75 percent of the population lost an average of 19 pounds for lack of food.
The extreme poor said they dropped even more weight than that.
The 2016 Living Conditions Survey (Encovi, for its name in Spanish), conducted among 6,500 families, also found that as many as 32.5 percent eat only once or twice a day — the figure was 11.3 just a year ago.
How can the people of a nation with such plentiful resources end up starving? Through the wonders of socialism!
Venezuela is yet another example in a long, sad list of examples of centrally planned economics failing. As Ludwig von Mises explained so thoroughly, centrally planned economies are always doomed to fail. It’s not possible for a handful of individuals to accurate determine the wants and needs of millions of people. Especially when the wants and needs of every single one of those millions of people are constantly changing.
The only question here is whether or not the Venezuelan government will do the decent thing and disband itself or if the people will have to rise up and overthrow it.
Donald Trump has promised to bring in a new wave of protectionism for American businesses. This news has been met with cheers from the small government advocates in the Republican Party. The democrats haven’t been cheering but only because Donald Trump is promising it. If Hillary Clinton had promised it they would be cheering but at least the cheering wouldn’t come immediately after claiming they’re for a small government.
Protectionism is almost always promised by people who blame foreign countries from a bad domestic economy and this case is no different. Trump and the republicans are claiming that China has been stealing American jobs. But Jack Ma, Chinese billionaire, sees things slightly differently:
Ma says blaming China for any economic issues in the U.S. is misguided. If America is looking to blame anyone, Ma said, it should blame itself.
“It’s not that other countries steal jobs from you guys,” Ma said. “It’s your strategy. Distribute the money and things in a proper way.”
He said the U.S. has wasted over $14 trillion in fighting wars over the past 30 years rather than investing in infrastructure at home.
While I disagree with his claim that the money was merely misappropriated, he’s entirely correct in saying that the $14 trillion spent in fighting wars was wasted.
Any economist who isn’t a complete moron, of which there are very few, knows that wars don’t produce wealth. Sure, it often looks like wars are good for the economy because jobs are created to feed the war machine but none of those jobs are productive. They exist to destroy wealth. Every piece of military machinery is build to be destroyed. Ammunition is expended. Tanks are either destroyed in combat or destroyed after they’ve been made obsolete by a new tank. Aircraft carriers that aren’t sunk by the enemy are sunk by the owners when they’re decommissioned to make way for the new fleet. Every building, road, and telephone pole destroyed in a war must be rebuilt afterwards. No actual wealth is created by war. Wealth is merely dumped into building expendable equipment or redoing work that was previously done. This is also why fourth generation warfare is so effective. One side spends pennies while the other spends trillions.
Instead of waging an endless war, the people of the United States could have been doing productive things. But the government chose warfare, the people rolled over and accepted warfare, and a huge amount of wealth has been diverted to unproductive endeavors, which has done nothing good for the economy. China isn’t taking American jobs, the United States government is destroying those jobs.
Everybody loves freedom so long as it’s the right kind of freedom. Neoconservatives love freedom right up until somebody wants to marry somebody of the same sex. Neoliberals love freedom right up until somebody wants to buy a firearm. Statist libertarians love freedom right up until somebody wants to opt out of paying taxes to fund the
military national defense force appointed by the duly elected representatives of the Very Small Government. Likewise, a lot of people love free markets until they fail to serve the market. When that happens those people turn into big government twats:
With competition so fierce and profit margins so small — roughly 2.7 per cent on average — the role Quebec’s highly interventionist government should play in one of the province’s most dynamic industries remains a source of contention.
The debate is not new and was rekindled earlier this year when Carlos Ferreira, owner of a well-known eatery, said Montreal should impose quotas in neighbourhoods to limit competition and help struggling legacy restaurants stay in business.
“I don’t believe in the free market anymore,” Ferreira said at the time. “We have to protect the good restaurants.”
And by “good restaurants” he means his restaurant.
Although I won’t claim that Quebec’s restaurant scene is currently a free market, the market was free enough that the barrier to entry was low enough for Ferreira to enter. Now, like most established corporations, he’s finding that the pressures of continuously appealing to the market tiresome and wants the State to step in to protect him and his interest at the expense of everybody.
I say the expense of everybody because as things currently stand consumers have all of the power. If a restaurant starts serving shitty food consumers can go to a competing restaurant. New restaurants have to attract customers and that means appealing to consumers. What Ferreira wants is to restrict those consumer’s choices and therefore limit the power they have.
This is nothing new. The biggest threat to free markets are successful entrepreneurs because they’re the ones that throw money at politicians to get laws passed that hinder their competitors.
Although it’s unlikely he actually said it, it is often claimed that Albert Einstein said that the definition of insanity is doing something over and over again and expecting a different result. By that definition there are a lot of insane people out there discussing mainstream economics.
Take this article, for example. The article tries to argue that Keynesian economics could save the United States. The problem with the article, besides its advocacy of nonsense, is that it’s based on the false premise that the United States government ever stopped following Keynesian economics.
The United States is in the mess that it’s in, in part, because it followed Keynes’ advice instead of Mises’. Instead of relying on free markets, a commodity based currency, and debt avoidance the United States has been relying on cronyism, a fiat currency, and racking up more debt than a drunken teenager with their parents’ credit card. The natural correction mechanisms of markets have been suppressed for decades, which has lead to a massive misallocation of resources. Eventually the problem will become so bad that no force will be able to continue suppressing these market forces and people will get to enjoy the mother of all depressions. Debt, likewise, is unhealthy in the long run because creditors eventually refuse to loan any more money (or buy your debt in the case of the United States) and call in outstanding loans. When those loans are called in and you don’t have the money to pay you end up going bankrupt (or killing your creditors as the United States will likely try to do).
The current United States economy is what you get when a government goes full Keynesian. If you’re really interested in trying to fix this mess you should pick up some books written by Ludwig von Mises and follow their advice.
Today is Cyber Monday, which may have been the first in a long list of regular words to get the word “cyber” needlessly tacked onto it. While people do their cyber shopping on Cyber Monday for cyber deals they may ask themselves, why the fuck can I order a big screen television for a few hundred bucks but can’t even get a simple medical diagnosis without blowing through my deductible? The answer to that, as with the answer to most economic questions along those lines, has to do with government granted monopolies:
Take a look at this chart assembled by AEI. It reveals two important points. First, there is no such thing as an aggregate price level, or, rather what we call the price level is a statistical fiction. Second, it shows that competitive industries offer goods and services that are falling in price due to market pressure. In contrast monopolized industries can extract ever higher rents from people based on restriction.
There’s no such thing as an aggregate price level? Next you’ll tell me that gross domestic product is a made up number as well!
If you click on the link and look at the chart you’ll see that prices for college tuition, textbooks, childcare, and medical care have been increasing rapidly whereas the prices for television, toys, software, and wireless services have been decreasing rapidly. The difference? The goods and services that have been increasing in price are all monopolized or otherwise heavily restricted by the State whereas the goods and services that have been decreasing in price all exist in markets with an extremely high level of competition.
The takeaway from this is that there is a vicious cycle when it comes to prices and the State. When prices go up people demand that the State intervene to bring prices down. Usually it was the State’s involvement that caused the prices to go up in the first place and if people get what they want the prices will go up even further as the State gets further involved. With the ramifications of the Affordable Care Act (ACA) becomes apparent many people are demanding the State step in to fix its mess. But most people aren’t demanding that the State decrease its involvement in the healthcare market. Instead they’re demanding that it further increase its involvement by implementing a single payer system. In other words, people are demanding that the vicious cycle be continued and if it is (which it almost certainly will be) we’ll see healthcare prices jump even higher (but those increases will probably be hidden in payroll taxes so most people remain ignorant of them and thus believe that the problem was solved).