The worst recovery since World War II

I realise that Cecil the Lion and such things are more important, but this bit about the American “recovery” being the worst since World War II is perhaps worth a passing glance:

The economic expansion—already the worst on record since World War II—is weaker than previously thought, according to newly revised data.

From 2012 through 2014, the economy grew at an all-too-familiar rate of 2% annually, according to three years of revised figures the Commerce Department released Thursday. That’s a 0.3 percentage point downgrade from prior estimates.

The revisions were released concurrently with the government’s first estimate of second-quarter output.

Since the recession ended in June 2009, the economy has advanced at a 2.2% annual pace through the end of last year. That’s more than a half-percentage point worse than the next-weakest expansion of the past 70 years, the one from 2001 through 2007. While there have been highs and lows in individual quarters, overall the economy has failed to break out of its roughly 2% pattern for six years.

Meanwhile things are not so great here either and for similar reasons. Three more years of Labor ought just round things out nicely.

Aren’t you glad Obama is president?

Meanwhile, while we agonise over Cecil, there is this to distract your attention. From Drudge:

IRAN: Obama Admin Lying About Nuke Deal for ‘Domestic Consumption’…
ARMS RACE: Saudis Want More Missiles…
Top French Official Contradicts Kerry Claims…
TEHRAN SAYS US EXPERTS BANNED FROM UN INSPECTIONS…
Rulers urge baby boom to double population…

But look on the bright side. There is also this:

Japan unveils ‘Death Star’ laser weapon…
Most powerful in world…

Oh, and I almost forgot:

China, Russia to hold military drills…

The future is shaping up so well.

UPDATE: The video above is of John Kerry and Energy Secretary Ernest Moni emphatically stating that they have not read the side deals with Iran. Nothing is any longer a scandal. But nothing makes sense any more either.

The art of the impossible

I so much liked Andy Warhol’s “art is what you can get away with” that I bought a copy of the poster, and a tomato soup mug with the words around the rim. This is an article, Can You Get Away With It? Then It Was Probably Art This Year with a title obviously designed with Worhol in mind. What makes it art? The price tag perhaps, but what else who can know.

Today’s international art practice comprises such a bewildering array of idioms, schools of one, strategies, styles and projects, each with its own recondite vocabulary and apologists, that a kind of cultural gridlock has taken hold – even as works arise that almost dare the audience to shout “Bogus!” and “Shame!” Last month, an orange stainless-steel balloon-dog sculpture by Jeff Koons sold at Christie’s for almost $60-million (U.S.).

Henry Spearman, the Sherlock Holmes of economics

I was reminded of Milton and Rose which made me think of the Marshall Jevons crime fiction series:

Marshall Jevons is a fictitious crime writer invented and used by William L. Breit and Kenneth G. Elzinga, professors of economics at Trinity University, San Antonio and the University of Virginia, respectively.

It was Breit’s notion to write a mystery novel in which an amateur detective uses economic theory to solve crimes. Elzinga was enthusiastic about his colleague’s idea and not only encouraged him to proceed but also decided to take an active role in writing the book. Over the next twenty years, on top of their academic schedules, Breit and Elzinga co-authored three mystery books featuring Harvard economist-sleuth Henry Spearman. The first Henry Spearman Mystery, Murder at the Margin, came out in 1978, and was followed by The Fatal Equilibrium (1985), A Deadly Indifference (1995) and The Mystery of the Invisible Hand (2014).

Ken Elzinga was at Freedomfest, attesting to his fine economic credentials, and gave a presentation on how he came to write the series with his partner who has unfortunately passed away. But the one thing that I learned that has helped bring the books alive – I am reading the third one right now – is that the main character, Henry Spearman, is designed after Milton Friedman, Professor of Economics at Harvard though he may fictionally be. And the one problem they had in writing the series was that Rose Friedman did not see herself mirrored by Pidge Spearman, and for reasons I cannot see doesn’t like the way Henry’s wife is depicted. The books are fun to read, but are better if you are an economist, although it is not an essential. A large part of their sales, it turns out, are as assigned texts as part of an economics course.

The self-preservation of the West versus a nuclear Iran

From Sultan Knish, The Myth of Iran’s Peaceful Nuclear Program. But a myth is something that people at least half believe, if not actually a literal truth, then at least as a framework in which to understand what cannot otherwise be explained. We know what Obama is up to, and probably even why. The question is why so many others are going along. Everyone, including Obama and John Kerry, understands all of this completely:

Last year Iran was selling gasoline for less than 50 cents a gallon. This year a desperate regime hiked prices up to over a dollar. Meanwhile, Iranians pay about a tenth of what Americans do for electricity.

Unlike Japan, Iran does not need nuclear power. It is already sitting on a mountain of gas and oil. Iran blew between $100 billion to $500 billion on its nuclear program.

The Bushehr reactor alone cost somewhere in the neighborhood of $11 billion making it one of the most expensive in the world.

This wasn’t done to cut power bills. Iran didn’t take its economy to the edge for a peaceful nuclear program. It built the Fordow fortified underground nuclear reactor that even Obama admitted was not part of a peaceful nuclear program, it built the underground Natanz enrichment facility whose construction at one point consumed all the cement in the country, because the nuclear program mattered more than anything else as a fulfillment of the Islamic Revolution’s purpose.

Iran did not do all this so that its citizens could pay 0.003 cents less for a kilowatt hour of electricity.

It built its nuclear program on the words of the Ayatollah Khomeini, “Islam makes it incumbent on all adult males, provided they are not disabled or incapacitated, to prepare themselves for the conquest of [other] countries so that the writ of Islam is obeyed in every country in the world.”

Obama’s motives are clear enough and the dangers to every Western country, and not just Israel, are equally clear. The question is why nothing has been done by others to stop this process in its tracks. The instinct for self-preservation often seems to fall dead at the feet of ideology. But the will to power never falls dead. There are evil days ahead.

John Stuart Mill explaining what is wrong with Keynesian theory

I have just posted an article on “Mill’s Defence of Say’s Law and Refutation of Keynes” as part of the Liberty Fund discussion on “Reassessing the Political Economy of John Stuart Mill”. If you are interested in knowing how far economic theory has gone wrong since the Keynesian Revolution, you ought to have a look at this thread which includes not just me, but also Richard Ebeling, Nicholas Capaldi and Sandra Peart. However, my latest post is due to the editor at the Liberty Fund picking up an offhand comment of mine and asking me to expand. Why this did not occur to me on my own, I cannot say, but this is the first time in which I have written a condensed version of what is wrong with Keynesian macro using Mill’s Principles as the basis for understanding pre-Keynesian theory. This is the final para but I do encourage you to read it all.

Reading the three sections of the Principles together we find Mill arguing:

  • recessions do occur and when they do the effect on the labor market is prolonged and devastating;
  • recessions are not caused by oversaving and demand deficiency;
  • recessions cannot be brought to an end by trying to increase aggregate demand.

That is as complete a rejection of Keynesian economics as one is likely to find, and it was stated in 1848. These propositions and their supporting arguments were with near unanimity accepted by the entire mainstream of the economics profession through until the publication of The General Theory in 1936. Since then they have almost entirely disappeared resulting in a loss in our ability to understand the nature of recessions or what needs to be done to bring recessions to a timely end.

Mill is not hard to understand unless you have learned Keynesian macro first. And then it is very difficult indeed. But if your interest is in understanding things such as why the stimulus was such a catastrophe, I cannot think where better to go to find out than from Mill. And if you are interested in Mill, then you should read this Liberty Fund discussion first.