Economics Uber Alles

I’m trying to understand some logic. Maybe I just don’t get it. I mean, I’m weak on economics… however, I think it’s a lot to do with modern economics simply not being logical. There are assumptions that just don’t fit together.

For instance, the concept of state intervention is bad and horrible if the government imposes protective tarriffs on an industry or regulates or trust busts. The economy should be allowed to succeed or fail on it’s own merits. If it can’t afford to compete… it dies.

However, apply that same logic to employment, and it’s just not true. Employees in one country should be competing with employees in another country. If the business can’t afford to stay in business and compete with an American workforce, then the government should intervene and supply them with h1b visas and a flow of immigration (and here, my donation to the chamber of commerce can grease the skids for law enforcement looking the other way on illegals).

Another one that doesn’t work for me is the GDP as a sign of economic / governing health. For GDP to be up, you need to have high consumerism. Economic warfare (used to be a thing) is where you expand consumption of your GDP into other countries, weakening their own industries. Somewhere along the line, high GDP became conflated with local consumerism. This could be why the cheaper the better is the new mantra, making China the prime source for cheap trade – but I can’t understand why our economic policy doesn’t recognize high consumption of another country’s goods as a negative on GDP. The formula literally has imports as a negative. The other thing showing consumerism as the ultimate check on economic health is the concept of the government “stimulus”. I’m sorry, but stimulating consumerism, where a great many cheap goods come from a foreign country, is not going to raise your GDP. Retail does not increase GDP.

Consumerism is also a negative in societal and cultural health. Usually high consumers are really quite poor. The more wealthy people spend loads of money at once on very few items that become family heirlooms – like jewels, high quality furniture, antiques and antiquities, large homes that can be passed down. Having to spend smaller amounts of money on consumables with rapid turnover creates a maddening cycle where you can’t save for something better that lasts longer, but you still need to replace the item.

So in a consumer society, the target is having lots of lower-middle income people stuck in a rapid consumable turnover. This keeps GDP high as we are making more product.

However, what happens if fewer jobs are available to them? Well, that’s why the government stimulates the economy with welfare. Now, they have disposable income to keep making purchases.

Is that actually healthy?

In the economic discussions I have seen, especially on the mainstream right, there seems to be an antipathy towards creating an economic environment that creates more jobs and higher wages in our country that employs people in our country. To them, it requires government interference. At the same time, they want welfare to be abolished. How do you bridge that? You can not have it both ways and remain a human being, much less support that GDP (i.e you economic health). I bet you anything the chamber of commerce knows this… and they decided welfare should stay to keep consumption up. Why else do elected Republicans avoid entitlements?

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31 thoughts on “Economics Uber Alles”

  1. Stina:
    I’m trying to understand some logic. Maybe I just don’t get it. I mean, I’m weak on economics… however, I think it’s a lot to do with modern economics simply not being logical. There are assumptions that just don’t fit together.

    I think you are on to something here. But you might be trying to understand logically the most complicated societal interaction in existence. So don’t get your hopes up. I sat here thinking about pointing out some things that are causes of some of the strange effects but I realized how quickly it would go well beyond any ability I have to make sense of it. Politics, religion, trade, human nature, those actual things or beliefs about them. Crime, or its cousin, fraud or simple sub-optimization of production, finance and investments in areas like the stock market for example. Too much for me.

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  2. “In the economic discussions I have seen, especially on the mainstream right, there seems to be an antipathy towards creating an economic environment that creates more jobs and higher wages in our country that employs people in our country. To them, it requires government interference.”

    It does require some interference – lowering the corporate tax rates so our companies won’t move HQ to say… Ireland (with the lowest first world tax rates and one of the most highly educated work forces in the world). This is exactly what the govt should be doing imho.

    My favorite example involves my former governor (now Senator Scott) who spent 70% of his time outside Tallahassee poaching companies in the Rust Belt with low taxes and fewer regulations. It worked; he helped create not only thousands of new jobs but an increase in tax revenue. This is why FL is sitting in the black!

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  3. Zman’s weekly podcast, released today, covers this topic. He notes that economics is the tool, while culture is the hand that wields that tool. Or at least, that’s the way it should be. Instead, culture is now beholden to the marketplace. It is the elevation to capitalism into a religion instead of being a means to an end. Man is not simply an economic unit, the success of which is solely determined by higher economic productivity.

    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP. It turns out that these are not the only things people value. Even li’l Marco Rubio is getting in on the act. Of course, the usual suspects are on the attack, notably Kevin Williamson, who hates his fellow citizens.

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  4. drlorentz:
    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP.

    This is just wrong. Capitalism and improved efficiency by the very nature of their demands require a work ethic that keeps one focused on what is best for both the consumer and the provider.

    Sloth is the enemy of morality and yes, I am a devoted fan of Max Weber. Don’t agree with his respect for bureaucracy but surely support his opinion that the Protestant ethic provided the mental attitude in a society that promotes spirit of capitalism and favours entrepreneurship. The rate of industrial growth depends upon the values professed by the religion of the society.

    See: Islam.

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  5. EThompson:
    I am a devoted fan of Max Weber

    Weber was a progressive. Even worse,

    Weber’s analysis of modernity and rationalisation significantly influenced the critical theory associated with the Frankfurt School. After the First World War, he was among the founders of the liberal German Democratic Party. He also ran unsuccessfully for a seat in parliament and served as advisor to the committee that drafted the ill-fated democratic Weimar Constitution of 1919.

    Weber’s philosophy is not exactly consistent with advocacy of capitalism just because he wrote a book with the word capitalism in the title.

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  6. EThompson:

    drlorentz:
    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP.

    This is just wrong. Capitalism and improved efficiency by the very nature of their demands require a work ethic that keeps one focused on what is best for both the consumer and the provider.

    This is an outdated and frankly thoughtless way of thinking. Take a moment to listen to your senator’s brief speech and critique what he said instead of delivering an NPC-like recitation of the orthodoxy.

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  7. drlorentz:

    EThompson:

    drlorentz:
    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP.

    This is just wrong. Capitalism and improved efficiency by the very nature of their demands require a work ethic that keeps one focused on what is best for both the consumer and the provider.

    This is an outdated and frankly thoughtless way of thinking. Take a moment to listen to your senator’s brief speech and critique what he said instead of delivering an NPC-like recitation of the orthodoxy.

    I think there must be a right way and many wrong ways to do, or think one is doing Capitalism, a word I don’t even like to use, preferring free market instead. There’s no question in my mind that in America today we are doing much of it wrong.

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  8. Bob Thompson:
    I think there must be a right way and many wrong ways to do, or think one is doing Capitalism, a word I don’t even like to use, preferring free market instead. There’s no question in my mind that in America today we are doing much of it wrong.

    I agree with you.   I don’t even like to use the term “free market.”   I thought President Trump did a lot to break through the noise when he started talking about “fair market” capitalism.

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  9. MJBubba:

    Bob Thompson:
    I think there must be a right way and many wrong ways to do, or think one is doing Capitalism, a word I don’t even like to use, preferring free market instead. There’s no question in my mind that in America today we are doing much of it wrong.

    I agree with you.   I don’t even like to use the term “free market.”   I thought President Trump did a lot to break through the noise when he started talking about “fair market” capitalism.

    My personal definition of “free” is “fair.” One can’t be free if the system is rigged. Trump is right.

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  10. drlorentz:

    EThompson:

    drlorentz:
    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP.

    This is just wrong. Capitalism and improved efficiency by the very nature of their demands require a work ethic that keeps one focused on what is best for both the consumer and the provider.

    This is an outdated and frankly thoughtless way of thinking. Take a moment to listen to your senator’s brief speech and critique what he said instead of delivering an NPC-like recitation of the orthodoxy.

    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

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  11. EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

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  12. Bob Thompson:

    drlorentz:

    EThompson:

    drlorentz:
    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP.

    This is just wrong. Capitalism and improved efficiency by the very nature of their demands require a work ethic that keeps one focused on what is best for both the consumer and the provider.

    This is an outdated and frankly thoughtless way of thinking. Take a moment to listen to your senator’s brief speech and critique what he said instead of delivering an NPC-like recitation of the orthodoxy.

    I think there must be a right way and many wrong ways to do, or think one is doing Capitalism, a word I don’t even like to use, preferring free market instead. There’s no question in my mind that in America today we are doing much of it wrong.

    Right, but it won’t be remedied as long as any complaints about the way the economy is organized is treated as heresy. It was gratifying to see Rubio say something different. He probably didn’t come up with it by himself; some young staffer wrote it for him. Likewise, the groypers are pushing back against Conservative Inc orthodoxy along somewhat different lines. If there is any future in conservatism, this is it. Otherwise, the Progs will eventually win.

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  13. drlorentz:
    He rightly decries the looting of social capital in the service of improved efficiency and higher GDP. It turns out that these are not the only things people value. Even li’l Marco Rubio is getting in on the act.

    Rubio is correct in his diagnosis, but I think he goes off the rails when he says (1:45), “deciding what government’s role is in addressing that—that should be the core question, the central debate of our national politics”.  No, I think the “core question” should be a top-to-bottom investigation of how more than a century of “progressive” policies, starting with Wilson, accelerating with the New Deal, redoubling in the Great Society, and growing without limit in the age of all-reaching regulation and the administrative state, have destroyed the foundation of what was once an economy and society which created a productive, just, and innovative society that created more real wealth than all of the rest of the world’s economies combined all by itself, before the dead hand of government and the gigantism and unproductive financial jiggery-pokery which was its direct result destroyed that economy, shifted the focus of business from productivity to speculation, and destroyed the family (particularly among minorities and the poor), which was the foundation of all of that prosperity.

    What exists in the U.S. today among the giant financially-driven globalist corporations is a mockery of the free market.  These companies are the creation of and beholden to government, and intertwined with it.  They are acting rationally in their own self-interest given the perverse incentives government has created.  It’s just that these incentives do not remotely align with the well-being of the “citizens” upon whom that government preys.

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  14. EThompson:

    MJBubba:

    Bob Thompson:
    I think there must be a right way and many wrong ways to do, or think one is doing Capitalism, a word I don’t even like to use, preferring free market instead. There’s no question in my mind that in America today we are doing much of it wrong.

    I agree with you.   I don’t even like to use the term “free market.”   I thought President Trump did a lot to break through the noise when he started talking about “fair market” capitalism.

    My personal definition of “free” is “fair.” One can’t be free if the system is rigged. Trump is right.

    Yes, but it is no good to use “personal” definitions.   It is better to use definitions held in common.

    Which is why I am using “fair trade” instead of “free trade.”   There are too many people with confused ideas about what ‘free trade’ means.

    And, I think “fair trade” is more useful than “capitalism.”  There is a lot of confusion in the world.  My primary example of confusion about what capitalism means is Pope Francis.  He clearly thinks of all capitalism as something that we would describe as “Peronist crony capitalism.”

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  15. John Walker:
    I think the “core question” should be a top-to-bottom investigation of how more than a century of “progressive” policies, starting with Wilson, accelerating with the New Deal, redoubling in the Great Society, and growing without limit in the age of all-reaching regulation and the administrative state, have destroyed the foundation of what was once an economy and society which created a productive, just, and innovative society that created more real wealth than all of the rest of the world’s economies combined all by itself, before the dead hand of government and the gigantism and unproductive financial jiggery-pokery which was its direct result destroyed that economy, shifted the focus of business from productivity to speculation, and destroyed the family (particularly among minorities and the poor), which was the foundation of all of that prosperity.

    From a political standpoint, there is a need to distinguish between those who are true political progressives and those who are capable of recognizing the false and damaging effects of ‘progressive’ political policies on the economic system, even while many of the latter have benefited from those structural misapplications of government influence they can be converted to supporting an approach that works better for all.

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  16. drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

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  17. 10 Cents:

    drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

    You can be blissfully ugly. No prob.

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  18. drlorentz:

    10 Cents:

    drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

    You can be blissfully ugly. No prob.

    I could have been but you had to tell me. I asked you not to tell me. 🙂

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  19. drlorentz:

    10 Cents:

    drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

    You can be blissfully ugly. No prob.

    Such a professional and civil debate point. You could have answered:

    “I disagree with your point of view; here’s why” and left it at that. BTW, don’t bother me with anything Rubio has to say. He’s a careerist and has zero experience in the private sector. His opinion is less than relevant.

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  20. John Walker:
    Rubio is correct in his diagnosis, but I think he goes off the rails when he says (1:45), “deciding what government’s role is in addressing that—that should be the core question, the central debate of our national politics”.

    Agreed. I only included Rubio’s speech because it shows that even Conservative Inc is beginning to understand the problem. The more consistent and considered view is expressed in Zman’s writings on the topic. That said, government clearly has some role in this process, if nothing else in the sense of removing itself from pernicious intrusions.

    I disagree with the entirely economic framing of the discussion, which is also Rubio’s point. Progressive policies since Wilson were clearly damaging economically; they were also damaging in other regards. Simply fixing the economic part is not the only, or even the most important, part to fix. The overarching theme is that maximizing GDP does not necessarily result in the best outcomes, i.e., the outcomes best for most citizens.

    Immigration is a good example of how the desire to maximize economic performance has negative non-economic effects that outweigh the benefits. It’s the privatization of social capital: communities are destroyed so someone elsewhere can make a buck. This will not end well.

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  21. EThompson:

    drlorentz:

    10 Cents:

    drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

    You can be blissfully ugly. No prob.

    Such a professional and civil debate point. You could have answered:

    “I disagree with your point of view; here’s why” and left it at that. BTW, don’t bother me with anything Rubio has to say. He’s a careerist and has zero experience in the private sector. His opinion is less than relevant.

    Scott Adams claims that about 1/3 of the population can not discern humor. I was initially skeptical of his assertion but confirmatory evidence pours in daily.

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  22. 10 Cents:

    drlorentz:

    10 Cents:

    drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

    You can be blissfully ugly. No prob.

    I could have been but you had to tell me. I asked you not to tell me. 🙂

    Since when does anyone around here do what you ask?

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  23. drlorentz:

    10 Cents:

    drlorentz:

    10 Cents:

    drlorentz:

    EThompson:
    Here we go again. You’ve obviously never owned your own business so never tell me again that my thinking is outdated. Put your money on the line every single day and then get back to me.

    You obviously know nothing about me and it shows. Ignorance is ugly.

    I thought ignorance was bliss. When did the definition change? Don’t tell me because I want to stay happy.

    You can be blissfully ugly. No prob.

    I could have been but you had to tell me. I asked you not to tell me. 🙂

    Since when does anyone around here do what you ask?

    Yeah, isn’t that why we got most of these members?

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