The other night I was watching interviewer Piers Morgan, CNN’s replacement for Larry King, who retired from TV in December 2010. Morgan was interviewing Arianna Huffington, the Greek-American political commentator-activist, whose Internet journal, the Huffington Post, or HuffPo, is comprised of daily comments from liberal bloggers and columnists. The subject was the American Dream and what’s happened to it.
They both agreed that the great entrepreneurial spirit that drove the American economy to heights of ingenious productivity was somewhat lacking. They blamed it on all sorts of factors, but neither Morgan nor Huffington was willing to acknowledge that socialist societies generally kill entrepreneurial freedom and enterprise. Neither did they acknowledge that the American government had become too big and too intrusive in the lives of its citizens. Of course, Morgan had been born in 1965 in socialist England and came to socialist America just a few years ago. So he simply doesn’t know what it was like to live in an America where true economic freedom once existed.
Nor was Ms. Huffington any more enlightening. She came from socialist Greece, which has now reached the end of its rope, married a rich Californian and has no idea how a free economy works.
Seattle reaped the benefit of a $20 million federal grant to weatherize homes in one of America’s "greenest" cities, and 16 months later, a whopping 14 jobs were created — making the cost per job a wondrous $1,428,571. "The jobs are not there," Todd Myers, author of the book Eco Fads, told Fox News. "So we’re training people for jobs that don’t exist." (In his famous October 27, 1964 speech in behalf of presidential candidate Barry Goldwater, Ronald Reagan noted that Lyndon Johnson's "War on Poverty" proposed job training camps "that we're going to spend each year just on room and board for each young person we help 4,700 dollars a year. We can send them to Harvard for 2,700!")
Last year, Seattle Mayor Mike McGinn skipped to Washington to blazon the new "green jobs" initiative that is supposed to create at least 2,000 jobs and shrink Seattle’s carbon footprint by insulating attics and crawl spaces in thousands of homes. But the project has fallen way short of its goals.
The Seattle Post-Intelligencer reported on the federal government’s latest environmental hoax:
Across the fruited plain, the average price of a gallon of gasoline is $3.62, a full dollar higher than it was just one year ago. Of that $3.62, 18.4 cents go directly to the federal government, which then disburses most of it to states for road construction and repair.
One might conclude that reducing or eliminating the federal gas tax would help stimulate the economy by leaving more money in the hands of individual Americans. President Barack Obama, on the other hand, thinks that the way to stimulate economic growth is to continue taking that money out of the private sector and spending it on projects that benefit labor unions and other politically favored entities. Therefore, he is sounding the alarm that if Congress fails to pass a transportation spending bill whose “key component is the federal gas tax,” according to FoxNews.com, the federal government will be deprived of billions of dollars in revenue, and as many as one million jobs could be lost. (Revenue and jobs denied to politically powerless Americans because of the ongoing levy don’t count in Obama’s world.)
President Obama sent a letter to House Speaker John Boehner (R-Ohio) Tuesday detailing seven new regulations that would each cost the U.S. economy more than $1 billion annually. With regulatory costs for American businesses of at least $38 billion per year and compliance costs of $100 billion per year, the seven proposed regulations would target transportation and the environment.
Boehner wrote the President last Friday, "The economy cannot withstand the barrage of major new federal regulations planned by the administration." He noted that the Obama Administration’s regulatory agenda counters Obama’s proclaimed motive to reduce burdens on American businesses. Boehner further noted that during the President’s tenure 219 rules have been proposed, each projected to cost at least $100 million.
Obama’s regulatory proposal includes four rules from the Environmental Protection Agency (EPA) and three from the Department of Transportation (DOT). An air-quality standards rule alone could cost between $19 billion and $90 billion per year for the U.S. economy.
According to Laura Chanthalath, manager at High’s Chimney Service, business is booming. Located in Gaithersburg, Maryland, her company might rebuild one chimney a day during the summer when business is slow. But now, thanks to Irene, “We’re completely booked. This has been a big boost to our business because the summer is extremely slow, especially in the chimney business. So it’s been good for us.”
Not counting lost man-hours and production, Irene is estimated to have cost at least $20 billion but, as the Washington Times wrote, “Economists say much of the rebuilding of roads, bridges and buildings, along with retail purchases … will recoup virtually all of the losses in the coming years.”
In banking, few values count more than consistency and integrity. The sovereign debt crisis in Europe, however, appears to have watered down those values in the case of some banks. The International Accounting Standards Board has stated that some European banks used the value provided by the Greek government in determining how much value Greek bonds should be counted in the assets of the bank. That would mean the bonds would be worth about 21% less than than the original valuation.
Those bonds on the open market, IASP Chairman Hans Hoogervost wrote in a letter to the European Securities Markets Authority — the organization responsible for regulating securities valuation — have much lower values than that. “This is a matter of great concern to us” the August 4th letter, which was made public on August 29th, warned. “It is hard to imagine that there are buyers willing to buy those bonds at the prices indicated by the valuation models being used.”
President Obama has nominated Princeton University’s Alan Krueger for Chairman of the White House Council of Economic Advisers (CEA), and if approved by the Senate, Krueger, a labor economist and the Treasury Department’s former chief economist, will replace Austan Goolsbee. "I am very pleased to appoint Alan and I look forward to working with him," Obama stated, shifting his eyes between two flat-screen teleprompters during a statement on Monday. "I have nothing but confidence in Alan as he takes on this important role as one of the leaders of my economic team."
Not surprisingly, reports that the Federal Emergency Management Agency (FEMA) is running out of money have surfaced. The fund’s capacity has been maximized by the most recent natural disaster, Hurricane Irene, which is estimated to cost billions of dollars.
With less than $800 million in its disaster aid coffers, the Federal Emergency Management Agency has been forced to freeze rebuilding projects from disasters dating to Hurricane Katrina to conserve money for emergency needs in the wake of Irene. Lawmakers from states ravaged by tornadoes this spring, like Missouri and Alabama, are especially furious.
In its annual Index of Economic Freedom, the joint effort by the Heritage Foundation and the Wall Street Journal, Canada ranks 6th among the 179 countries of the world, ahead of the United States (9th), the United Kingdom (16th), Japan (20th) and Germany (23rd). Considering ten components of economic freedom (among them: Business Freedom, Fiscal Freedom and Government Spending), the report ranks countries on the degree to which “individuals are free to work, produce, consume and invest in any way they please, with that freedom both protected by the state and unconstrained by the state.”
The latest report from the Canadian Labour Force Survey illustrates the degree to which Canadians have benefited from the rebound from the global recession by exercising their freedom to work, with employment increasing by 215,000 from July, 2010 and 675,000 since the bottom of the recession in July, 2009. In a workforce of 17 million, this represents an improvement of 4 percent at a time when employment in the United States has remained flat over that same period. Unemployment in Canada is 7.2%, a full two percentage points lower than in the United States.
Many in the media are saying how unusual it is for our economy to be so sluggish for so long, after we have officially emerged from a recession. In a sense, they are right. But, in another sense, they are profoundly wrong.
The American economy usually rebounds a lot faster than it is doing today. After a recession passes, consumers usually increase their spending. And when businesses see demand picking up, they usually start hiring workers to produce the additional output required to meet that demand.
Some very sharp downturns in the American economy, such as in the early 1920s, were followed quickly by bouncing back to normal levels or beyond. The government did nothing — and it worked.