Archive for the ‘Economics’ Category
Chicago Tea Party?
Rick Santelli at CNBC hammers the economic situation caused by the Obama Administration. You will be standing and cheering! “The government is promoting bad behavior… do we really want to subsidize the losers’ mortgages… This is America! How many of you people want to pay for your neighbor’s mortgage? President Obama are you listening? How about we all stop paying our mortgage! It’s a moral hazard”
In: Economics, Politics · Tagged with: CNBC, Rick Santelli, Tea Party
Is the ‘era of big government’ over?
This is a transcript of the Unto the Breach program. Click here for the audio.
13 years ago, President Bill Clinton said that “the era of big government is over.” But is it? Now president-elect Barack Obama trying to bill big government as the solution. And his trillion-dollar stimulus is VERY big government.
Maybe Obama should read the 2004 UCLA study that said FDR’s policies actually prolonged the Great Depression by seven years. Big government was just as much of a problem then as it is now and will be under Obama.
How easy the big-government types in Washington and the media drive by the fact that it was big government “solutions” that brought us into the economic downturn to begin with. Pay no attention to the man behind the curtain, right?
In: Economics, Politics · Tagged with: Barack Obama, Bill Clinton, Constitution, FDR, Great Depression, stimulus, Supreme Court
North vs. South (automakers, that is)
With the bailout money being thrown around like beer in Wrigley Field, the federal government has managed to insert itself in the car business. I would call what has happened the nationalization of the auto industry (Chávez and Putin style), and I would like to see what clause in the Constitution gives the federal government this power.
Auto manufacturers in the south (relatively speaking) produce cheaper, more desirable vehicles, and do so with almost half of the labor cost of Detroit ($40-45 an hour salary plus benefits vs. $70-75 an hour average). In a sane country this would be a good thing. But the government has decided to reward the companies that produce more expensive and less desirable vehicles with tens of billions of our taxpayer dollars. Southern auto manufacturers and employees are forced to finance their competitors in Detroit. What sense does that make?
Clearly northern auto companies had no worries whatsoever that the bailout would not go through. I guess that’s why they pay their lobbyists the big bucks, right? This doesn’t pass the smell test. And whatever is going on, ‘We the People’ are footing the bill.
With the federal government using our money to reward their buddies in Detroit, and sticking it to the southern automakers, could this lead to another north-south split in the United States?
In: Economics · Tagged with: bailout
Incoming! Sharia Finance is on its way
In: Economics, National Security · Tagged with: Shariah Finance, Shariah law
The Real ‘Failed Policy of the Past’
Despite the fact that our government is to blame for our financial crisis, they have somehow found a way to make the situation worse. The government is getting away with this because so many voters do not understand why we are in this mess to begin with. We are to blame, the politicians are simply taking advantage of us. It could be that capitalism and individual liberty are two of the “failed policies of the past” that Barack Obama laments.
That being said, it is our duty as an American citizens to learn why our markets are in the shape they are in. Don’t simply get caught up in the feel-good platitudes of “hope” and “change.” Look before you leap. The most simple and effective way to reach the truth is to watch this video. In 10 minutes, you will have a full understanding of why this happened, and what the real “failed policies of the past” are. It is high time American voters got their heads out of the sand when it comes to economics. We can then make an informed decision about the future of our country.
If our nation continues on its present course, capitalism will be destroyed, and socialism will rise from the ashes. I cannot impress upon you how important this situation is to our future generations. Our free market has been assaulted by the government, and this may well be the straw that broke the camel’s back. Watch the video.
Note: Due to a complaint by Time Warner (who gave $338,527 to Barack Obama’s campaign), the video has been removed from YouTube (Google gave Obama $420,174). It can still be found on the user’s channel, but Obama’s truth squads have been popping up everywhere, so watch it while you still can. The truth can’t hide from the truth squads forever.
(Mussolini had the Blackshirts, Hitler had the Brownshirts, now Obama has the truth squads?)
In: Economics, Politics · Tagged with: 2008 election, Barack Obama
Obama Campaign’s Definition of Patriotism? Higher Taxes!
Democrats are continually crying that their patriotism is in question. Well, I would argue that if your patriotism is called into question, chances are, your actions fall short of patriotic.
But now thanks to Democrat VP nominee Joe Biden, we have learned what the Obama campaign views as patriotism.
Biden was interviewed by reporter Kate Snow on ABC’s Good Morning America. After asking Biden why the Obama campaign wasn’t any further ahead in the polls than they were, Kate brought up that Americans making more the $250,000 a year would pay more in taxes under the Obama plan. Biden responded: “It’s time to be patriotic, Kate. Time to jump in. Time to be part of the deal. Time to help get America out of the rut.” (more…)
In: Economics, Politics · Tagged with: 2008 election, Barack Obama, Joe Biden, taxes
The Truth about the Bush Tax Cuts
Wealthy Democrat politicians are never afraid to tell voters that they do not need the Bush tax cuts. What they are afraid to tell voters is that tax cuts help the economy.
When tax rates are cut, government revenue actually increases. That is why revenue collections were at an all-time high this year. They were also higher in each year of Reagan’s two terms than any previous year in American history. How does this work? Simply put, when less of your money goes to taxes, it gets spent in the economy. The increase in economic activity, even at a lower tax rate, generates more tax revenue. When taxes are cut, everybody wins (except liberal politicians).
What is happening today is the same thing that happened in the 1980’s when Reagan cut tax rates, the 1960’s under John F. Kennedy’s cuts, and also in the 1920’s.
Democrats love to point out the rise in the deficit during the Reagan administration, but who is it that spends the money? It’s not the President, but the Congress, and all spending bills come from the House of Representatives. Congress found a way to write enough checks that even the record revenues couldn’t cover. Economist Thomas Sowell points out: “There is no amount of money that Congress can’t outspend.” Reagan got the blame for a Democrat-controlled Congress’ spending spree. If they are so concerned with the deficit, then why don’t they slow their spending? Conversely, in 1994, Republicans took control of the House, and Bill Clinton took the credit for the budget surplus, although he was not a member of the House.
Democrats also want you to believe that Bush’s tax cuts are “for the rich.” While the rich do get more of a tax cut, they have more of the burden in the first place (For a different spin on this, read Ten Men Went to Dinner). What these politicians won’t point out is that the “rich” actually shoulder more of the tax burden than they did before the tax cuts. Before the tax cuts, in 2000, the top quintile (top 20 percent of wage earners) paid 81.2% of taxes. In 2004, shortly after the Bush tax cuts went into effect, they paid 85.3%. The next to lowest quintile (20-40%) went from 1.1% to -0.9%, and the lowest quintile went from -1.6% to -2.9%. The bottom 40% are actually subsidized, so of course they would benefit less than those who actually pay taxes.
Democrats have done a pretty good job of misleading the American people on the tax cuts. The scary thing is that in order to gain more power in Washington, they will knowingly put an end to something that is proven to strengthen our economy. America did not become the greatest country in the world (in only 200 years) because of high taxes and great government programs. Do we really want to put more politicians in office that will kill our economy in order to get elected?
©COPYRIGHT 2007 UNTO THE BREACH MEDIA
In: Economics · Tagged with: tax cuts
Exporting Capitalism in Latin America
Socialism is on the rise in Latin America. Venezuela’s president/dictator Hugo Chavez has admitted that his goal is to purge the region of American influence. Along with his alliances with the Iranians and North Koreans, Chavez has financed the Bolivian Movement Towards Socialism Party, sent aid to the leftist Sandanista party in Nicaragua, and passively supports the communist FARC terrorists in Columbia.
The Chinese have increased their influence in the region – trading raw materials for finished goods and offering investment in China’s growing infrastructure.
Polls show that the United States’ popularity is falling in many Latin American countries and less than a third of those polled support democracy and free market economies.
How can we combat this growing socialist threat? We can export capitalism. The US – Peru Trade Promotion Agreement will allow free trade between the US and Peru. Consumers in both countries would benefit from the duty-free products.
The agreement would counter Chavez’ anti-American influence in Peru, and bolster an economy that has seen five percent growth and half a million Peruvians rise above poverty since 2001. Nearly half of Peru is still poor, and are vulnerable to the socialist reforms that are sweeping the area.
Peru is a key ally in the region. They have stood against Chavez’ anti-American rhetoric in the Summit of the Americas, have voted in favor of nuclear safeguards in Iran, have condemned North Korea for its offensive nuclear tests, and are partners with the US in combating regional terrorism and narcotics traffic.
It shouldn’t end with Peru, but it is a good place to start. Free trade agreements would boost confidence in democracy and free markets, while combating anti-US sentiment in the region. Instead of a fighting a new cold war with a Union of Latin American Socialist Republics down the road with bullets, we should counter the threat now with economics.
Chris Carter is the host of “Unto the Breach.”
COPYRIGHT 2007 CHRIS CARTER
In: Economics · Tagged with: FARC, free trade, Hugo Chavez
Who is to Blame for High Gas Prices?
With oil prices hovering around $100 a barrel, we are in store for plenty of political grandstanding from Democrats. This is sure to score points with constituents since liberals are all about emotion, and not about facts. History, however, tells us that oil companies aren’t the problem – government is.
It is awfully easy to blame the ones charging the high prices. In fact, Big Oil has repeatedly been investigated for price gouging, but each time investigators return empty-handed. Let’s just say we wave our magic wand and turn America into Hillary Clinton’s dream of “shared prosperity” by regulating CEO pay and Big Oil’s profits. Surprisingly, the price would almost remain the same. If CEO’s with their big salary and benefit packages were told to report to work free of charge, the price of a gallon of gas might drop one penny. If all of Big Oil’s profits were redistributed to where Hillary thought best, the price might drop a dime. I would call eleven cents a drop in the bucket, definitely not the place for consumers to fix blame.
Now, how about we look at the ones who are actually causing the high prices?
The government tried to regulate the oil industry in the 1970’s. Price controls produced disastrous results, which led to shortages across the country. Americans burned an estimated 150,000 barrels of oil per day waiting in line at gas stations – that is the ones that still had gas. Previously, the Middle East cut supply back in 1967, but since there were no price or wage controls, there was no crisis. During the Reagan years, the oil industry was de-regulated, resulting in remarkable increases in production, and a drastic reduction in price.
Demand for oil has increased significantly over the years, but again the government has got in the way. With a rising demand and a fixed supply, the result is higher prices. There have been no new refineries and virtually no increase in refining capacity in this country since the 1970’s. One reason is when they do try to put in a new refinery; environmentalists miraculously find a long-lost endangered creature living precisely in the spot they want to build. In addition, the process to obtain the required Federal permits to actually build a new refinery can take years.
It is estimated that 1.2 trillion of the world’s 1.6 trillion barrels of oil shale are in the United States. It is also estimated that 10 billion barrels of oil rest under the Alaska National Wildlife Refuge (ANWR). The footprint required to drill would be less than one-half of one percent of ANWR. Significant reserves have also been discovered in the Gulf of Mexico and off the coast of California, but all of these sources are prevented by environmentalists and Congress.
Different additives for different geographical locations, like California, can also play havoc on the pricing and supply, thanks to local or state government restrictions. Maryland has a law that actually sets a minimum price, thanks to industry lobbyists. The government’s share of the cost of a gallon of gas in September 2007 is 14% and 16% for diesel. Although the government did not help with any exploring, drilling, refining, or distributing, they still take in more revenue from something that they did not produce than the oil companies could ever dream of. More government, anyone?
Economist George Reisman says that our own domestic policies are what make us dependent on foreign oil. “Today, it is possible once again to bring about a dramatic fall in the price of oil – indeed, one even larger than occurred in the 1980s. And it could begin right away. All that is necessary is to abolish the U.S. government’s restrictions on domestic energy production inspired by the environmentalist movement.”
A solution actually came from someone in the government. Representative Ron Paul (R-TX) introduced H.R. 2415, the Affordable Gas Price Act. The bill would allow offshore drilling, eliminate federal restrictions on building refineries, promote free trade, and suspend Federal fuel taxes when the price reached a certain amount. The bill has been sitting in committee since May of 2007, the same place where it died during the 109th Congress. Apparently Congress is not interested in solutions.
There is no reason why we should restrict our domestic production, especially when it empowers OPEC. Imagine Wal-Mart and Kmart, who are in competition with each other. If for some reason Wal-Mart suddenly decided to not sell half of its merchandise, Kmart would sell more than Wal-Mart and gain control of the retail market. Kmart then could charge more for their merchandise, because Wal-Mart could not supply enough to meet the demands of the market. That would not make any sense in the corporate world, so why does it take place in the oil market? With our production artificially restricted, OPEC can cut back on its output and charge higher prices. Our own Congress and the environmentalists are in fact hurting us and helping OPEC. Perhaps the ones in need of investigation should be them.
We need to stop shooting ourselves in the foot. Like it or not, for the time being oil is the blood that runs our country, and in order for the economy to stay healthy, it is critical that we maintain a steady supply of affordable oil. We need to get the government (and environmentalists to a point) out of oil, not invite more government regulation.
Chris Carter is the host of “Unto the Breach.”
COPYRIGHT 2007 CHRIS CARTER
In: Economics · Tagged with: ANWR, environmentalism, H.R. 2415, OPEC, Regulation, Ron Paul
Economics and Bodily Functions
A Different Look at Economic Systems
Your body functions are almost totally on autopilot. When you eat breakfast, you do not have to spend hours consciously telling your body to digest the food and then tell it what nutrients to send where. If you exercise, you do not have to monitor the amount of oxygen in your bloodstream, or decide at what rate your heart should beat. There is no need to remember to breathe. If there was, how could you sleep?
You simply eat pop-tarts, watch Bullwinkle, or whatever it is that you do while these remarkably complex functions carry on automatically. Your digestive system knows not only when you are hungry, but maintains proper nutrition levels for the trillions of cells that make up your body. How would you know when your heart needed more potassium, or your shoulder muscles needed some extra protein? Can you imagine a species that would have to devote thought to these basic survival instincts? That creature would not last long enough to make a fossil.
Now to the point: an economic system is just like a human body. Either you can let it run itself, or you can try to control it. Consider two examples:
Ours is an economy driven by prices. While you may not like prices, they are actually an incredible thing. When a car manufacturer makes a new model, they determine a price based on the money invested in the production of that vehicle (parts and labor). Consumers may like the features of the vehicle and feel that it is worth the price. If it is too expensive, or they do not like the features, they will not buy the vehicle. A strong demand shows the manufacturer they are in line with what consumers want. A lack of demand indicates that either the price is too high, or the model is unpopular. To stay in business, the company would have to modify future models.
Prices are a way of communicating what the consumers want. Prices also encourage consumers and producers to be efficient – you probably use a lot less gasoline when it is three dollars per gallon than when it was one dollar. The system works wonders if it is free from interference by the government. The free market, therefore, is like the cells in your body – millions of consumers functioning autonomously.
Now take the communist economy – it is like the species that has to think about every function in its body. In the Soviet Union, the government literally controlled everything. With no prices to govern the economy, manufacturers made too much of some products and not enough of others. People would stand in line for hours or perhaps days for boots while tomatoes wasted away in warehouses. There was no mechanism to monitor the demand or the quality of products; the consumers were simply stuck with what they had. The decisions for hundreds of millions of consumers were made by a handful of bureaucrats in Moscow.
The quality of life was drastically lower in the Soviet Union than in the United States. Because of prices, Americans had better products and were far more efficient than their communist counterparts.
The government knows how many tomatoes you need about as well as you know how much vitamin C to give one particular cell in your body. The free market works wonders, if left to function on its own. Our system is not perfect – we need major reform in certain areas. But we can be certain that government interference (like subsidies or universal health care) will throw a wrench into the greatest economy in history.
Chris Carter is the host of “Unto the Breach with Crushing Chris Carter.”
COPYRIGHT 2007 CHRIS CARTER
In: Economics · Tagged with: capitalism, communism
