Archive for the ‘Economy’ Category
A Preview of Socialist America
Just The Numbers, Mam
By: Les Dunaway
An article by Alberto Mingardi was published in the Friday 23 March 2012 Wall Street Journal titled The European Union According to Hayek. It is an impressive, short summary of key ideas from Friedrich Hayek and an explanation of how Hayek predicted the collapse of the EU, which we are now witnessing. Notice that Mingardi refers to the breakdown of the European social model.
Friedrich August Hayek, who passed away 20 years ago today, was one of foremost social scientists of the last century. A Nobel laureate in economics, Hayek is often associated with a crucial intuition that informs his critique of socialist systems. There is, in society, a “knowledge problem”: Economic life requires the coordination of individual planning. The relevant knowledge for economic planning is dispersed rather than concentrated in society. If this makes coordination challenging enough in a market system, it also makes coordination a virtual impossibility under central planning: The planner can never secure and process all the necessary information to provide detailed guidance to any given development in society.
Even though this argument was originally deployed against hard-core socialism, it works pretty well against the soft-core version widely adopted by European democracies. Centralized welfare systems are necessarily run by a bureaucratic leadership. Pace Max Weber, the “technical superiority” of such an organization is simply not enough to master the nuances of a complex society. Centralized government allocates resources badly—regardless of its intentions. The very nature of centralization makes impossible for it to collect and compute all the information that is needed. This is as true for any grand scheme of industrial planning as it is for the government-led welfare systems that characterize Europe’s “social model.”
Georgia Prisons: Spending Smarter Not More
By: J. Randolph Evans
ONE BILLION DOLLARS. That is how much the State of Georgia spends every year on corrections. According to the Report of the Special Council on Criminal Justice Reform for Georgians, “[d]uring the past two decades, the prison population in Georgia has more than doubled to nearly 56,000. …If current policies remain in place, analysis indicates that Georgia’s prison population will rise by another 8 percent to reach nearly 60,000 inmates by 2016, presenting the state with the need to spend an additional $264 million to expand capacity.”
The Crash of 2008 and Why We’re Still In It!
By: Les Dunaway
Today’s excellent Forbes article “Tim Geithner Covers for Corruption On Pennsylvania Avenue” by Charles Kadlec inspired me to dig into my pile of “Why the Crash?” writings. Mr Kradlec does an excellent job of summarizing the various crimes that led to the crash, so what I’ve collected here is, mostly, for detail and a clearer look at the perpetrators.
The top line summary of the whole mess is “That’s what happens when liberals meddle in the free market”; subtitle “That’s what happens when people who know better show no b…s!”.
Your Freedom Is Slipping Away
Just The Numbers, Mam
By: Les Dunaway
This past week, the 18th Annual Index of Economic Freedom was published. It shows that our country has slipped to 10th in this critical ranking. The 15th Index published in January of 2009 ranked the US at 6th. So, in the three years since, we’ve dropped 4 places.
If you haven’t been following this Index, I suggest you watch the short video at the top right and for more depth, read the explanation at the lower right of its front page. The sound bite description is There is a close correlation between economic freedom and the health of a country’s economy. A reverse version of the same idea is the comment made by an East German around the time of the fall of the Berlin Wall: We pretend to work and they pretend to pay us.
Cooking The Books – Part 2 of 10
Just The Numbers, Mam
By: Les Dunaway
In Nov 2011 I wrote about the DOL jobs report and discussed how those numbers had been cooked to make the job situation look better. Well, as has been said “You ain’t seen nothin yet”. We can expect bogus numbers month by month leading up to November.
Last weeks report has an even more tenuous relation to reality. First, let’s talk about what the “unemployment number” is supposed to be – the percentage of people looking for work who can’t find work. So, it’s the difference between the labor force and the number of people working, expressed as a percentage. So, to make the numbers better, people are removed from the labor force. For instance, if someone has used up their weeks of unemployment payments, they are no longer counted – because if they aren’t applying for unemployment benefits, they can’t be unemployed. Right?
