Catallaxy Files

The economics and politics of the West are being ruined by the 101%, that brigade of citizens who feel it is their right to consume at least 101% of the value of the taxes they have themselves contributed. And, of course, we are not really talking about a mere 1% above their contributions but vast amounts beyond anything they have contributed themselves. We are beyond safety nets for those who fall through the cracks. This is real money and a major drain on finances.

Two bits of reporting have brought this to mind. There is first Geoffrey Barker’s maunderings in the AFR yesterday. Large swathes of the people of Europe apparently are not in favour of the “austerity” programs being put in place. Whether they live in economies whose governments are bankrupt in many different uses of the term, they want their fair share with fairness related to what they can demand through the ballot box. I particularly like his use of the word “all” in the following passage:

In France, Germany, Greece and elsewhere, voters are challenging the neo-liberal insistence that the imperative of economic efficiency has to trump all notions of fairness and distributive justice.

Well, this so-called fairness doctrine will be the ruin of a great deal. When the Euro finally falls apart, we will see how much the Greeks and others like the inflation that will follow. They can elect who they like but unless the incoming party comes with a magic lantern and genii, unless they get down to work and produce something, there will still be nothing to distribute, and with the Germans not there to bail them out, there will be even less.

Meanwhile the budget here in Australia has raised the standing of the Labor Party at least a tick, and who knows what’s to come? The 101-percenters will not be denied and we have just the government to indulge them at every turn.

There is no ecstasy to compare with the insanely intense pleasure that comes when your team wins. Last night was the most incredible finish in English football ever. My team, since the early 1970s, is the unfashionable and largely unloved Queen’s Park Rangers which I have been following since my time working as a gardener for the London Borough of Hammersmith. Where I lived, I could have followed Chelsea or Fulham instead but it was QPR then and it is QPR now. And they took part in a game that is never going to be forgotten by anyone who watched it and cared about the result.

QPR, to ensure that it stayed in the Premier League, had to win away to Manchester City. The alternative was that Bolton had to lose or draw. For Manchester City, they had to win the game to win the League. They and Manchester United were something like 19 points clear of everyone else, but they were tied with each other. If both won, MC would take the title. If MC lost or drew, it would go to MU. But if MC won, QPR would be out of the Premier League unless Bolton did the honourable thing and lost themselves. QPR therefore had to do the impossible and win away to Manchester City.

On the last weekend of the season, at midnight  to us but 3:00 pm in England, all ten games kicked off at exactly the same moment. QPR held out for half an hour but eventually City scored. But the phrase “against the run of play” was invented to describe this game. In the only attack QPR made in the entire first half, they drew level on a disastrous error by the City fullback and the half ended 1-1. Meanwhile, Bolton was ahead in its game 2-1 so QPR absolutely had to win to stay up.

In the second half around ten minutes in, the nitwit of a QPR captain, in the most important game his team would play for years, elbowed one of the City players and was sent off. So for the rest of the game, needing to hang on, it was ten v eleven. And then, in what was possibly the most unbelievable moment I may ever have witnessed in sport, QPR scored an absolutely brilliant goal and it was 1-2 where it stayed all the way until the 93rd minute. Everyone back defending, and if they got the ball down the field it would go. No Ranger player went past the half way line.

And then the game at Bolton ended and it had drawn [which ensured QPR would stay in the Premier League no matter what]!! And there were still two minutes left at MC v QPR and in those two minutes Manchester City scored the two goals they absolutely had to score if they were to win the game and the league. So whether QPR fell apart just then because they knew the Bolton result or whether they just lost because they were not as good a side and this was Manchester City’s year of destiny, who can know? But the absolute pleasure of watching this game, where QPR almost did the impossible and even when it didn’t still ended up with what it had come to town to get, has left me as happy as anything in sport has ever done.

I would also strongly recommend Steven Kates’ Free Market Economics. An Introduction for the General Reader which is in countless ways one of the best introductions to economics ever written; and this assessment includes amongst other things the author’s superb ability to put economics into perspective in terms of the history of economic thought.

I keep going back to this fantastic book. Lucidly written, it can be read with tremendous gain (to students of economics of any level, beginner to advanced scholar) in a few days, maybe even in just two days. At the same time, it is so substantial as to invite countless returns for further appreciation.

As a person strongly influenced by the Austrian school (including its post-Misesian anarchist wing), what gives me a special kick is the fact that the author, who ‘heretically’ recognises a substantial role for government and the state, offers an accurate and brilliant account of a free economy.

Of course, this places Kates much closer to (the great Austrians) Mises and Hayek than to the anarchist successor school, whose anarchist stance I do not share at all, while recognising the school’s considerable intellectual achievments.

I hope Georg Thomas won’t mind my retrieving his kind and generous comment from the thread that followed my putting up a reading list in the history of economics the other day. And I hope you won’t mind if I say that this is how I think about the book myself.

Moreover, the book is, in my view, unique. It explains everything found in an introductory text on economics but in no chapter is its explanation the same. Everything is saturated in the role of the entrepreneur and builds from the crucial importance of uncertainty.

It never assumes there is no government, but instead assumes that there is and that this government will make laws and regulations that are sometimes a net benefit but are also usually the very reason economies underperform and all too frequently fall into recession.

It explains value added across an entire chapter. The fact of the matter is that without understanding value added properly it is impossible to understand good policy from bad. And so far as I know, this book is unique in explaining this crucial part of economic reasoning at the introductory level.

In teaching supply and demand it assumes no one can ever know where either of those curves actually is, a very different way of thinking about markets. The traditional form of marginal cost pricing is shown to be an inane framework that provides no insight into how either prices are set or volumes determined. Instead it explains the margin as the dividing point between the present and the future which the farther into one looks, the less that one can know anything relevant about what is going to take place.

It disdains Keynesian economics even while explaining modern macro, showing why it is an insulting form of nonsense, and I might add, is the only book to my knowledge anywhere to do so. If you know of another written within the last forty years, you must let me know.

Instead, it explains prosperity and recessions using the classical theory of the cycle which was based on a proper understanding of Say’s Law. It is definitely, and I do mean definitely, the only place in the world you can find out about Say’s Law and how Keynes mangled its interpretation leaving the world’s economies in the mess they are in with no theoretical guidance system with which to find our way out.

And as the title makes clear, the point of the book is to explain why there is no other means to manage an economy than through the free market which is not the same as laissez faire.

How to Get the Book

The book is available in paper from the Edward Elgar catalogue for £23.96. And if you would like to read it in an electronic format, this is where you should go which is taken from the Elgar website:

www.ebooks.com
www.books.google.com/ebooks
www.google.co.uk/ebooks

View our ebooks that are with Dawsonera
View our ebooks that are with EBL
View our ebooks that are with Ebooks.com
View our ebooks that are with MyiLibrary
View our ebooks that are with EBSCOhost
View our ebooks that are with Ebrary
View our ebooks that are with Google

Here is the link to the google ebooks in the UK where the price is a mere $A29.00.

You surprised by this?

France’s new Socialist president owns three holiday homes in the glamorous Riviera resort of Cannes, it emerged today.

The 57-year-old who ‘dislikes the rich’ and wants to revolutionise his country with high taxes and an onslaught against bankers is in fact hugely wealthy himself.

Every time I think about Craig Thomson I am truly disgusted by it. I think there was a story the other day that there have been mass resignations from the HSU but so far I have not come across any statements from one of its present or past members. After all, the HSU is supposed to represent them in public and I suspect these are people with very few public speaking skills. I would therefore love someone to go and find an orderly or two and ask them how they feel.

Whatever else we might do and say on this side of the fence, there is a consistency and honest that surrounds it. We are all for people becoming wealthy, and we even have a standard mechanism for finding one’s way to riches which is to produce something that someone else is willing to pay for. We are content to leave everyone to lead their own lives with minimal interference from others. We want the government out of our lives to the greatest extent possible and we want to keep most of the income that we earn for ourselves. Parties of the right have been instrumental in legislating the social safety net but have refrained from the grand stupidities such as wars on poverty.

The instance of a politician on the left living a life in total contradiction of the words they speak is a commonplace. Al Gore is almost the perfect example of someone with a do-as-I-say-not-as-I-do mentality. They are everywhere.

Listening to Julia Gillard about how she wants to level our incomes even as she changes the rules on superannuation that affect we citizens but from which she and her fellow legislators are protected has almost disappeared into the flow of events, so common an occurrence it really is.

Sure she cares about the people on low income, which we know because she tells us so herself. But if she really did in any kind of serious way she could not possibly be introducing a carbon tax along with much else she has been party to. She seems to be a bitter bitter woman and the only revenge we will have, which is not much at all but it’s all there is, is to know she will be deservedly remembered for a very long time as the worst Prime Minister this country has ever had.

Drudge in a banner headline and in scarlet letters:

B A C K L A S H: POLL: OBAMA TRAILS ROMNEY 7%

Well the answer to whether endorsing gay marriage is all that great a political idea seems to have been revealed rather swiftly. The fate of the world, American foreign policy and economic management being determined in this way is quite incredible. Obama’s own polling must have told him how badly he was slipping because it did seem a very large risk to take a punt on this issue, specially after the vote in North Carolina.

This might well have been the dirtiest campaign of all time had there been any serious dirt to find about Mitt Romney. But if all you have is tying a dog in his basket to the roof of your car when going on holiday and being mean to a fellow high school student when you’re 16, you haven’t really got all that much dirt to throw.

Drudge provides no details as yet but will happily forward as they come to hand.

The Details: It’s the Rasmussen Daily Tracking Poll so it’s one of the good ones.

The Rasmussen Reports daily Presidential Tracking Poll for Friday shows Mitt Romney earning 50% of the vote and President Obama attracting 43% support. Four percent (4%) would vote for a third party candidate, while another three percent (3%) are undecided.

It really is a different world from the old days. Yesterday it transpired that when Mitt Romney was 16 he was mean to some kid in school. Today we now find out, but this time from the alternative media and spread via Drudge, that Barack Obama had once shoved a little girl although from the story I cannot tell how old the young Obama was.

And as Breitbart asks:

You’re wondering what the rules are regarding a candidate’s past; how far back we’re allowed to go in an attempt to define them — the answer is simple: The corrupt media will let us know.

Can we be that far away from really getting into the issue of Obama’s cocaine and marajuana marijuana using past?

And as for Obama’s supposedly path breaking views on gay marriage, Dick Chaney Cheney had said exactly the same. One more thing we would never find out if we depended on the corrupt media for our news.

I suspect even now Solyndra is a name generally known only to people who read blogs like this. It shouldn’t even be a close election but for reasons difficult to fathom, it is still neck and neck. These kinds of ads will make a difference, and then there will be the debates.

[Via Instapundit]

The story begins:

President Obama today announced that he now supports same-sex marriage, reversing his longstanding opposition amid growing pressure from the Democratic base and even his own vice president.

In an interview with ABC News’ Robin Roberts, the president described his thought process as an ‘evolution’ that led him to this decision, based on conversations with his staff members, openly gay and lesbian service members, and his wife and daughters.

Mitt Romney not surprisingly takes the other view:

Obama’s likely Republican opponent, Mitt Romney, opposes gay marriage, and fought his state’s highest court, as governor, when Massachusetts became the first state to legalize gay marriage in 2004. Romney said on the campaign trail Monday that he continues to oppose gay marriage.

‘My view is that marriage is a relationship between a man and a woman,’ Romney said. ‘That’s the position I’ve had for some time, and I don’t intend to make any adjustments at this point. … Or ever, by the way.’

And it is interesting that there was a vote just yesterday in North Carolina, a swing state, on this very issue:

Just yesterday, in North Carolina, voters overwhelmingly approved a constitutional ban on gay marriage. Obama carried North Carolina in 2008, and its status as a 2012 battleground state was guaranteed by Democrats’ decision to hold their convention in Charlotte this summer.

Update: An interesting discussion at Hot Air by Ed Morrisey who supports gay marriage but also wonders which way the politics will flow:

There’s too much uncertainty on both sides about how swing voters will react if it becomes a major issue in the campaign. Will they follow North Carolina’s and other states’ lead by voting against gay marriage and its proponent-in-chief? Or will they tune Romney out because he’s not talking about jobs and his economic program?

I have pilfered these absolutely astonishing photos from Andrew Bolt, partly for the benefit of the minute number of Catallaxy people who don’t also read Andrew’s blog but also to make another point that our socialist friends never seem to understand.

These photos are the before and after shots of various buildings in East Germany which highlight the transformation that the capitalist system brought to the socialist East. In poor economies, even the most minimal maintenance absorbs a major quotient of available productivity. No one pays for upkeep since most of everyone’s efforts are needed just to keep body and soul together.

Thus it is with pollution and the environment generally. Only a truly rich capitalist society can indulge itself by raising emission control standards and reducing the environmental damage caused by the production process.

The effect of killing off industry in the West through “environmental protection” legislation is to transfer production to economies that are vastly less wealthy than we are. They are like the East Germany of the past only far poorer than they were then. There is not a chance that they would have anything even remotely like the ability to keep the environment clean and to reduce whatever forms of pollution may actually be causing damage.

Anyone who was genuinely worried about the environment would therefore encourage more industrial activity in economies that can afford to maintain a less polluting environment. The environmental destruction throughout the socialist economies of the Soviet Bloc ought to be highly instructive but has never proved to be to those who see no merit in free enterprise. But having a look at these photos might, hopefully, bring some attention to the environmental damage that driving industrial production into the third world will cause.

This is a theme I have seen in much of the coverage on the budget, nicely stated in this case by Terry McCrann:

Swan is taking from the well-off – like the superannuation hit to high-income earners and abandoning the company tax cut – so he can redirect money to lower-income families and the disadvantaged.

This is such historic nonsense from our government, to equate ownership of business with being wealthy. To be in business is to take on an extremely difficult role in society, to run our enterprises as a means of making a living. It is no guarantee of wealth and for anyone to think so betrays a mentality that ought to have disappeared during the Marxist thirties. Instead we see it alive today in the socialist government we have saddled ourselves with.

So let me say this very clearly: running a business does not mean you are rich. Increasing after-tax earnings for a business helps the poor and the unemployed. In a capitalist economy there is no class war. Employing people is not “exploitation”. Employing other people is what you want a business to do. Lowering business taxes is good for all parts of society.

When will they get it? Unfortunately, it seems bred into the bones and they will be the ruin of us all.