Keynesian Policies and Obamacare reduce Household Incomes

Posted by PITHOCRATES - August 25th, 2013

Week in Review

President Obama is a horrible president.  Why?  Because he’s black?  No, that’s not it.  He’s a horrible president who just happens to be black.  One of the big reasons why he is a horrible president is because he is a Keynesian.  And has tried the same failed Keynesian policies of the past to turn the economy around.  And just as they failed in the past they have failed consistently during the Obama presidency.

Keynesian economics states that during a recession when people aren’t spending money the government should do something about it. They should start spending money.  And they should implement policies that put more money into consumers’ pockets.  So they go out in the economy and spend it.  Thus generating economic activity.  And pulling the nation out of recession.  The government could cut taxes to put more money into consumers’ pockets.  But they don’t like cutting taxes.  Preferring to add more welfare programs.  Which give money to consumers.  So they can spend it.  That’s how President Obama has chosen to pull the nation out of the worst recession since the Great Depression.  And as expected by every non-Keynesian, his Keynesian policies have been an abject failure (see Incomes Have Dropped Twice as Much During the ‘Recovery’ as During the Recession by JEFFREY H. ANDERSON posted 8/23/2013 on The Weekly Standard).

New estimates derived from the Census Bureau’s Current Population Survey by Sentier Research indicate that the real (inflation-adjusted) median annual household income in America has fallen by 4.4 percent during the “recovery,” after having fallen by 1.8 during the recession.  During the recession, the median American household income fell by $1,002 (from $55,480 to $54,478). During the recovery—that is, from the officially defined end of the recession (in June 2009) to the most recent month for which figures are available (June 2013)—the median American household income has fallen by $2,380 (from $54,478 to $52,098).  So the typical American household is making almost $2,400 less per year (in constant 2013 dollars) than it was four years ago, when the Obama “recovery” began.

Importantly, these income tallies include government payouts such as unemployment compensation and cash welfare. So Obama’s method of funneling ever-more money and power to Washington, and then selectively divvying some of it back out, clearly isn’t working for the typical American family. Nor would his proposed immigration bill help the income prospects of the median American.  And perhaps it’s just a coincidence, but the span of time over which the typical American household’s income has dropped by about $2,400 a year (during an ostensible “recovery”) corresponds almost exactly with the span of time that we’ve been living with the looming specter of Obamacare—which began to be debated in earnest around June 2009.

Another reason why President Obama is a horrible president is that he is more interested in transforming the nation than he is in improving people’s lives.  He wants to make it what it was before President Reagan made the nation great again.  President Reagan followed President Carter.  Who was another horrible president.  Because of his Keynesian economic policies.  While President Reagan wasn’t a Keynesian.  Which is why the economic recovery following Carter’s malaise was one of the strongest economic recoveries in history.  Making President Reagan a great president.  Because he made life better for people.  Unlike Carter and Obama.  Who made life worse.  Because of their Keynesian economic policies.

Obamacare, the pathway to national health care, is a big driver of the fall in household incomes.  The plan for Obamacare was to put the private health insurance business out of business.  So Obamacare can evolve into full-blown national health care.  And to do that they forced businesses to spend more money on their health insurance for full-time employees.  Of course, the idea was for businesses to avoid this additional cost by pushing people to part-time.  And taking away their health insurance.  Advancing the nation further down the Obamacare pathway to national health care.  Which is more important to him than household incomes.  Which he will gladly trade away to transform the country.  Not to just what it was before Ronald Reagan.  But even further left.  Because, for President Obama, what he wants is more important than what the people want.  Jobs, a rising household income and private health insurance.  Which makes him a horrible president.  Just as his Keynesian economic policies make him a horrible president.

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Wind-Generated Electric Power is 2-3 times more Costly than Coal-Generated Electric Power

Posted by PITHOCRATES - August 25th, 2013

Week in Review

A lot of people think wind-generated electric power is free.  Because the wind is free.  But wind-generated electric power is not free.  Wind turbines are very expensive.  And you need a lot of them to produce enough electric power that is useful.  Making it more expensive than the old-fashioned power we once knew and loved.  That generated from coal-fired power plants.  And it’s not a little more expensive.  It’s a lot more expensive (see Offshore wind costs will fall if development continues by EDI Editor posted 8/23/2013 on EDI).

Now a study commissioned by the German Offshore Wind Energy Foundation, along with Siemens and other companies in the industry, has concluded that the cost of electricity from offshore wind can be reduced by about one-third over the next decade if development continues consistently. At present the cost of electricity produced by offshore wind is approximately three times the cost of conventionally produced power, so reducing costs is essential if widespread adoption is to happen…

In analyzing the projected cost development of electricity generated from offshore wind, the study concluded that costs could be reduced by about 31 per cent, assuming stable market development, reaching at least 9 Gigawatt installed capacity in Germany by 2023.

All right, wind-generated electric power costs three times as much to produce than conventionally produced power.  Such as from a coal-fired power plant.  But in a very rosy ‘best case’ projection where the economy is strong and there are great advancements in the technology of wind power they can bring the cost of wind-generated electricity down one third.  So it is only twice as costly as conventionally produced power.

So we will pay a premium for any electric power generated from wind turbines.  At worst it may triple electric power costs.  At best it may only double its cost.  Which is the last thing any of us want to hear as we struggle through the worst economic recovery since that following the Great Depression.  So why do it?

To save the planet, of course.  As the global warming fundamentalists warn us the end times will come unless we fall to our knees and affirm our belief in global warming.  And agree to pay 2-3 times more for our electric power to absolve us of our global warming sins.  And not to listen to the ‘factsayers’ who tell us the data shows the planet is NOT warming.  For Al Gore sayeth it is.  And he should know.  For he became a very rich man proselytizing people to the global warming faith.  Hallelujah.

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Republicans want a Hearing on Global Warming and Climate Change which worries Democrats

Posted by PITHOCRATES - August 25th, 2013

Week in Review

Global warming is like a religion.  You have to accept it on faith.  Because there is just no evidence proving it (see Global warming alarmists worried about House hearing by ASHE SCHOW posted 8/23/2013 on the Washington Examiner).

Temperatures will be a little cooler in September when Congress returns from August recess, but House Republicans may heat things up again with a hearing on global warming and climate change.

Democrats are wary of the move, according to Politico. “House Republicans have essentially called Democrats’ bluff by scheduling a long-sought hearing next month on climate change,” Politico said…

“After a quarter-century of wildly alarmist predictions that have failed to pan out — often with specific dates now in the past — we’d say the five-point decline Frank cites is dismayingly low,” said the Journal’s James Taranto, referring to a statement by physicist Adam Frank about how the percent of Americans who understand global warming as a problem has declined since 1989…

Stubborn temperatures that refuse to go up, predicted weather disasters that didn’t occur (such as record numbers of hurricanes) and arctic ice that just won’t melt — no wonder global warming alarmists are trying to diminish the hearing before it even happens.

Only the faithful believe in global warming.  Like in any religion.  They can’t prove global warming exists.  All of their dire predictions have been laughable failures.  Yet they tell the faithful to act as if global warming exists.  And to vote for them.  So they can pass more anti-business policies to save the planet from global warming.

Before global warming do you know what they were warning us about?  The coming ice age.   All during the Seventies climates experts were warning governments to start stockpiling food as the coming ice age was going to soon shorten the growing season and cause great food shortages (see Global Warming or The “New Ice Age”? Fear of the “Big Freeze” published 1/2/2013 on Global Research).  So it’s hard to take any climate expert seriously these days.  Especially when they switch warning us about global cooling to global warming within a decade or so.  For how can you be so sure about something only to change your mind and be so sure of the complete opposite thing?

Well, there is one way.  Faith.  For just as God moves in strange and mysterious ways so does climate.  To the faithful, at least.  Which is why the Democrats are wary of having a hearing on global warming and climate change.  Because Republicans don’t embrace the global warming faith.  They’ll want to move the debate into the temporal world of science and fact.  Instead of leaving any discussions of global warming in the spiritual world.  Where all discussions begin after an affirmation of the faith.  Like they do on the left.  Where they choose to accept global warming as fact.  Without proving it factually.

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Democrats in New York looking at Revising the Cost of Cow Poop

Posted by PITHOCRATES - August 25th, 2013

Week in Review

PETA doesn’t want you eating meat.  They say we should be vegetarians.  Because it is healthier for us.  And it will allow cows to live out their days naturally.  The way God meant them to do.  To graze, sleep and crap all over the land.  Instead of eating meat we can eat stuff that grows.  And dairy products from dairy cows.  For they have a pretty good life.  Food, shelter and a place to crap.  And someone to milk them.  Who could ask for anything more?  A pretty plush life on a small farm.  Not quite so nice on a large industrial farm.   Of course, there are some who are unhappy with the ethical treatment of so many cows.  Environmentalists.  Because of the crap (see Cuomo in Billion-Pound Manure Fight as New York Promotes Yogurt by Freeman Klopott posted 8/22/2013 on Bloomberg).

All that stands between dairy farmer Kerry Adams and expanding her herd of cows to tap New York’s booming yogurt industry is 1 billion pounds of manure.

Adams was planning to take advantage of a change Governor Andrew Cuomo pushed through this year that allows farmers to increase their herds to 299 from 199 before permits are required, which can add more than $150,000 to expansion costs. Then environmental groups sued to block the move, saying expanding dairy production will add 1 billion pounds (454 million kilograms) of unregulated cow dung annually, damaging waterways…

As in some other states, milk prices in New York are set by federal regulators. Even with increased demand from yogurt producers, prices aren’t rising, according to Novakovic and the New York Farm Bureau. To increase profits, farmers need to produce more milk, which means adding cows…

A permit requires farmers to handle the increased manure load. They must pay a certified planner as much as $15,000, obtain engineering designs for new systems that can cost $50,000 and execute them for about $100,000, the review said. That’s in addition to the $382,000 needed for cows, land and holding pens…

Adams and Travis Rea, whose family has owned a dairy farm north of Albany in Cambridge for 215 years, said they’re planning to mitigate their manure as they grow anyway. Both, though, are holding off on expanding until they know the outcome of the lawsuit.

“We don’t have much money day to day and we’re up against groups that do,” Rea said by phone. “The environmentalists, they kind of scare me.”

You would think that the most damaged drinking water would be from the wells under those herds these dairy farmers draw their water from.  Are they poisoning themselves?  If they are they must be a glutton for punishment.  Because they’re drinking the water their cows are pooping in.

Once the buffaloes roamed the Great Plains.  And the Native Americans followed these great herds.  Hunted them.  And drank the water all that buffalo poop eventually washed into.  With some estimates of those buffalo herds being as large as 30 million strong that must have been a lot of buffalo poop.  Yet the Native Americans didn’t bitch about it damaging the waterways.

The only thing that will truly please PETA and the environmentalists is if the human race just died out and became extinct.  But until we do they will make our lives as miserable as possible.  Such as interfering with free markets.  Raising the cost for anyone trying to do business.  And then bitch about all the cow poop we’re producing because some other anti-business law put a ceiling on milk prices.  Which made adding cows—and more manure—the only way to expand business.

It would be interesting to see what would happen if we pleased one of these leftist organizations.  Say PETA.  By freeing all captive farm animals.  Letting them live free in the wild.  Where they would all die from age.  Eating and pooping to their hearts content.  Which, of course, would draw the ire of that other leftist organization.  The environmentalists.  Because of all that poop entering our waterways.  For with no one killing cattle for their meat the cattle populations would grow like the buffalo populations once did.  So the environmentalists, of course, would call for the culling of those herds.  Killing animals to save the planet.  Wouldn’t those be interesting debates?  Between PETA and the environmentalists?  Two leftist groups attacking each other as if the other was a conservative.

Permit costs that can add $150,000 to a small family farm?  Fear of environmentalists?  What has this country come to?

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North Korea Manufactures and Sells Meth to Chinese addicts to bring Hard Currency into the Country

Posted by PITHOCRATES - August 25th, 2013

Week in Review

Keynesian economists, and those on the left, think there is nothing wrong with printing money.  Because they don’t understand money.  What it truly is.  So what is money?  It’s a temporary storage of wealth.  It is not wealth.  Doctors make a lot of money because they have learned great skills.  Skills few people have.  And doctors are willing to exchange these skills for money.  The wealth is a doctor’s skills.  The money temporarily holds this wealth until the doctor finds something to trade that money for.  From someone else that has wealth.  Who created something of value the doctor is willing to trade for.

All money did was make this trading of valuable things easier.  So we could trade with anyone even if they don’t want anything we can make or do.  A doctor doesn’t have to find someone who wants their gallbladder removed who has a television set if the doctor wants a television set.  The doctor can just go to a store and buy one.  Because of money.  Making the exchange of goods and services far easier than in a barter system.

Those who think money is wealth and that we should just print it and hand it out to the people are missing one very important point.  If you did this no one would have to work.  Those on the left would applaud that.  But if no one worked there would be no valuable things to trade.  And if there are no valuable things to trade then your money is worthless.  For if there is nothing to buy what good is having money?

North Korea has a lot of money.  But their money is worthless.  Because they just print it.  While their economy contains no valuable things to trade.  Not a big problem in a closed economy.  And you make your people slaves.  But it’s a problem if you want to trade with the outside world for the luxury items the lucky few in the ruling elite enjoy.  For if you have no valuable things in your economy then you must trade for valuable things with hard currency.  Money that isn’t worthless paper.  So North Korea came up with a way to get hard currency (see How North Korea got itself hooked on meth by Max Fisher published 8/21/2013 on The Washington Post).

A new study published in the journal North Korea Review says that parts of North Korea are experiencing a crystal meth “epidemic,” with an “upsurge” of recreational meth use and accompanying addiction in the country’s northern provinces…

So how do people in North Korea, a country where markets are so tightly regulated that even video CDs can be considered dangerous contraband and where social controls are often beyond Orwellian, manage to get hold of meth..?

The problem actually goes back to the 1990s, when North Korea experienced a famine so devastating that virtually the entire world believed the country would collapse at any moment. But it didn’t, in part because Pyongyang finally decided to open up the world’s most closed economy just a small crack, by allowing a degree of black market trade across North Korea’s border with China. The idea was that the black market would bring in food, which it did, preventing North Korea’s implosion.

The black market trade into China has remained that little bit open ever since, either because Pyongyang authorities can’t close it now or because they see some trade as beneficial, probably both. Some provinces along the border have seen their economies liberalize a tiny, tiny bit — most notably North Hamgyung, which is named in the North Korea Review report as particularly blighted by meth addiction.

In the years after the border with China opened that little crack, two other things have happened that led to the current meth crisis. First, medicine ran out and the once-not-terrible health system collapsed — more on this later. Second, North Korea started manufacturing meth in big state-run labs. The country badly needs hard currency and has almost no legitimate international trade. But it was able to exploit the black market trade across the Chinese border by sending state-made meth into China and bringing back the money of Chinese addicts.

This is where things started to spin out of control for North Korea. The state-run meth factories and the cross-border black market trade started to mingle. And some of that meth ended up migrating back across the border and into North Korea, through the black market trade that brings in Chinese rice and DVDs and the like.

This is where the collapse of the North Korean health system becomes relevant. As Isaac Stone Fish reported in a great 2011 Newsweek story, many regular North Koreans started using meth to treat health problems. Real medicine is extremely scarce in the country. But meth is much more common, which means that the prices of medical drugs are artificially inflated, while the price of meth is artificially low. In a culture without much health education and lots of emphasis on traditional remedies, people were ready to believe that meth would do the trick for their medical problems, and many got addicted.

Poor Chinese.  First the British got them addicted to opium.  Then North Korea got them addicted to meth.  It appears the Chinese people are nothing but pawns in the game of international trade.

Back in the days of mercantile Britain trade was all about who collected the most hard currency.  Basically gold and silver in those days.  The British loved Chinese tea.  And were filling ships full of the stuff to bring it back to Britain.  The problem was that the Chinese didn’t want anything the British were selling.  So Chinese goods were flowing to Britain.  But no British goods were flowing to China.  And without having exports to offset imports Britain was forced to trade the only thing they had that China wanted.  Their hard currency.  Their silver.  So Chinese goods flowed out of china.  And Britain’s hard currency flowed out of Britain.  So China was accumulating piles of hard currency while Britain saw their piles diminish.  Which was the exact opposite mercantile Britain wanted.  So they did something about it.  Thanks to India.

India was part of the British Empire.  And she grew opium poppies.  Something some Chinese did want.  So the British used this opium demand to stop the flow of hard currency out of the empire.  And traded Indian opium for Chinese tea.  This solved the trade deficit problem.  But it created a lot of addicts in China.  The addiction problem got so bad that it spawned two wars.  The Opium Wars.  Which did not end well for China.  And things did not get better in the century or so that followed.  And now here is North Korea.  Turning Chinese into addicts to get hard currency out of China (and into North Korea).  Just like the British did.  Of course, North Korea is nothing like the mighty British Empire.  So one would believe that China is allowing this addiction problem to happen.  As it is probably a smaller price to pay than the refugee problem should North Korea collapse.  And they may like that North Korean buffer between them and South Korea.  Japan.  And the United States.

North Korea is everything the left would like to have in the United States.  Tightly regulated markets.  National health care.  No rich people accumulating private property.  Where they frown on profits.  The even put people before profits.  Just like liberals want to do.  There’s no talk radio.  No Rush Limbaugh.  No Fox News.  No free trade.  No low-cost imports to undermine union manufacturing.  No obesity.  Because there is no junk food.  And no 32 ounce sugary beverages.  And a government that can do what is right for the people without having to worry about a Tea Party challenger in the next primary election.  North Korea is liberal nirvana.  Yet life there is horrible and wretched.  Because it’s everything liberals want.  But nothing the people want.

Liberals want to keep expanding government.  To have more government intervention into the free market.  But where does it end?  How far do they want to take things towards North Korea before they say they have enough?  And why anyone should worry about this is because as horrible and wretched life is in North Korea, those in the ruling elite have it pretty darn good.  Because the people in charge of these regimes never suffer like the people outside of the ruling elite.  So the farther they move towards North Korea the less they have to worry about an election taking away their comfy life.  This is why we should worry about a government growing larger.  For throughout world history life like that in North Korea has been the norm.  While life like that in the United States has been the exception.  And the United States has only been around for 225 years (counting from the ratification of the U.S. Constitution).  A crazy new fad the entitled ruling elite (i.e., liberals) would like to do away with.  So they can rule like they did in the good old days.  Much like they do today in North Korea.  Where the supreme ruler, Kim Jong-un, has an obesity problem.  One of the few in North Korea that isn’t gripped with a gnawing hunger every minute of every day.  This is life in a country where the ruling elite hates capitalism.  And puts people before profits.  This liberal nirvana.  Those in power live well.  While everyone else suffers.

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