Monthly Archives: September 2015

Why don’t economists get it?

Posted on by
Reply

China, India, Japan, US and Europe have weakening or underperformaning GDP growth. And by no coincidence at all, these are all economies that have tried a Keynesian expenditure program to end recession. The thing that is most astonishing is that there is virtually no economist of the mainstream who could even explain it. And as the article points out, this is even happening as the price of oil has plummeted.

Here’s a clue about what’s wrong with modern theory. Our economies are not saving too much. Our economies are being plundered of their savings by our governments who are wasting our resources on projects that will never bring a positive return. Go back to the stimulus packages and other government-directed expenditures of 5-6 years ago – some of which were even ludicrously described as infrastructure investment. What you are seeing today is the absence of the private sector projects that were forestalled back then. We are ruining our economies, and the economics profession is at the heart of the problem. Aggregate demand does not make an economy grow. Economies only grow if there is value adding investment. Seems obvious. Why don’t economists get it?

Waffle Street and Say’s Law

Posted on by
Reply

In re Waffle Street, Jimmy Adams has himself put up a comment in the comments thread.

While Steve may be unwilling to take an ounce of credit for it, allow me to publicly recognize his “little red book” as being the most influential of all the economic literature that I referenced in writing “Waffle Street.” Say’s Law is the transcendent and ironically, least appreciated, principle of economics. And no one explicates it better than Prof. Kates. Thanks again, Steve.

says Why is it my “little red book”? That’s why. The most astonishing part is that around once every decade or so some economist ends up stumbling onto Say’s Law and realises what it actually means and then tries to tell everyone else. The list is not that long, but includes Benjamin Anderson, Henry Hazlitt, William Hutt, Thomas Sowell, Art Laffer and Murray Rothbard. Once you see it, everything about how an economy works suddenly changes shape, and most importantly, Keynesian forms of economic management seems utterly insane. No one who understands Say’s Law is ever surprised that some Keynesian stimulus didn’t work, or that the rise in public spending ever does anything other than pull an economy down. And each of us has tried to explain as best we can why Say’s Law is so important but no one gets it. They don’t even get it to the stage where they could really answer that I see what you mean but I disagree. They do not even understand this enough to be able to explain what it is they disagree with. If you think that “supply creates its own demand” covers it, you have to ask yourself why no classical economist ever said it. The phrase comes from a book published in 1933 by a critic of Say’s Law which was then purloined by Keynes in the General Theory published in 1936. Say’s Law is not even all that hard to understand: all economic activity is driven from the supply side; none of it is driven from the demand side. What is true for an individual product is not true for the whole economy. If there had actually ever been a single Keynesian success story, there might be some case for the continuation of Y=C+I+G in our texts. But a Keynesian stimulus has failed, and failed spectacularly, on every single occasion it has been tried. Yet Keynesian macro persists in our texts. If you would like to understand the entire sordid story, my little red book will explain it, and is also the only place you can find out how the Keynesian Revolution came about.

Who is the ABC to preach to us about anything?

Posted on by
Reply

Did Jonathan Green really say this? From Andrew Bolt:

The other thing here on the point of shame and advertising your evil is that IS [Islamic State] depend on the likes of Tony Abbott to do that job for them – to exaggerate their evil, to continually talk about their death cultness, to parade this in front of us, this is doing their promotional work for them.

No doubt he can look himself in the mirror and see a fine, upstanding representative of the highest morality. The fact that others see him in a different way is merely because we are unable to see his virtues and deep insight into the human condition. Let me therefore also bring across the picture that Andrew put up.

isis murder

Pathological and psychotic, and that goes for anyone who does not condemn such barbarity to the absolutely fullest extent. Tell me how to exaggerate this kind of evil. This is sick and disgusting, and if there is anyone who does not agree, then what words shall we use to describe them? Who is the ABC to preach to us about anything?

Roncesvalles and the Europe to come

Posted on by
Reply

We live in such blessed times, as good as it has ever been if you are in a first-world western country far from the horrors elsewhere. The aim was always to bring the rest of the world up to the standards we created for ourselves and have continuously improved on. The reality will be that our way of life is being destroyed to the point where not all that far in the future, we will have our elites, as does every society, while the mass of humanity will live like dogs. A fascinating paper brought to light by John Hinderaker at Powerline: The Treason of the Professors. He has a summary of the paper he links to: Trahison des Professeurs: The Critical Law of Armed Conflict – The Academy as an Islamist Fifth Column.

The left in our societies has been a fifth column for the longest time. They have been enemies of the bourgeois state since the middle of the eighteenth century [vide French Revolution]. Over the past century, they teamed up with Stalin and have now joined Islamists in doing what they can to bring down the West. Many excerpts at the Powerline link but the article is long. Here is his abstract, itself as bleak as anything you might read anywhere:

Islamist extremists allege law of war violations against the United States to undermine American legitimacy, convince Americans that the United States is an evil regime fighting an illegal and immoral war against Islam, and destroy the political will of the American people. Yet these extremists’ own capacity to substantiate their claims is inferior to that of a critical cadre of American law of armed conflict academics whose scholarship and advocacy constitute information warfare that tilts the battlefield against U.S. forces. These academics argue that the Islamist jihad is a response to valid grievances against U.S. foreign policy, that civilian casualties and Abu Ghraib prove the injustice of the U.S. cause, that military action is an aggressive over-reaction, and that the United States is engaged in war crimes that breed terrorists, threaten the rule-of-law, and make us less safe. Rather than lending their prodigious talents to the service of their nation, these legal academics, for reasons ranging from the benign to the malignant, have mustered into the Islamist order of battle to direct their legal expertise against American military forces and American political will. This psychological warfare by American elites against their own people is celebrated by Islamists as a portent of U.S. weakness and the coming triumph of Islamism over the West.

This Article defends these claims and then calls for a paradigmatic shift in our thoughts about the objects and purposes of the law of armed conflict and about the duties that law professors bear in conjunction with the rights they claim under academic freedom. It then examines the consequences of suffering this trahison des professeurs to exist and sketches key recommendations to attenuate its influence, shore up American political will, and achieve victory over the Islamic State and Islamist extremism more broadly.

I don’t have to read the full article to know what he means, but I will do it anyway. Here is the last para which has only melancholy about it. There is no Charles Martel, nor with democratic politics as they are, can there be.

The warison sounds; the warning is sent; the assistance of the sacred and the profane is summoned. Whether once again the West will heed the call, march apace against the Islamist invaders, and deliver justice swift and sure to disloyal courtiers abasing it from within, or whether the West has become deaf to the plaintive, fading notes of one encircled knight who long ago called forth its soldiers and calls them yet again, will decide if the Song of Roland remains within the inheritance of future generations of its peoples. If the West will not harken now to Roland and his horn, neither it, nor its peoples, nor the law they revere will outlive the bleak day of desecration when Islamists, wielding their Sword, 776 strike his Song, all it represents, and all it can teach, from history.

To mention Roland and Roncesvalles to a modern European is as dead a notion as it is possible to be. When we were in that part of France a while back we went to the tourist office to find out where the battlefield had been. I admit to being surprised by this, but not only did no one know where it was, no one even knew what it was. I really don’t know how we get back from where we are.

Can he really be that stupid? Yes he can

Posted on by
Reply

Can he really have said this?

“If we do nothing, Alaskan temperatures are projected to rise between six and twelve degrees by the end of the century.”

Yes he did! It’s four paras down after the picture, and I can only hope that this is another parody website I haven’t picked up on. The only question I ask is why I had not heard this before until I read this. But it’s not he who is deranged, although the possibilities are immense, but the media who cover his every action who have not said a word. Does anyone believe anything like this? Does no one in the media think it is outrageous that this can be said by a President of the United States at an international conference? There is no adult free press in the United States, and if there is, the media are as whatever as their president. I really honestly don’t have the words to describe them or him.

How is this not the death of the West?

Posted on by
Reply

The only part of the globe in which individual freedom is among the highest and most important values is being inundated by people for whom individual freedom has next to no value within their cultural norms. Listening to the chants of “freedom, freedom” from people who have no idea what freedom means in a Western context makes me worry about the future like nothing else I have seen in my own lifetime. The virtually unknown lessons of Palmyra make you even wonder whether the architectural glories of Europe will remain a century from now.

And then there is the deal with Iran, a minor item on Drudge today, already old news.

ARMS RACE: Kerry Promises Billions in Weaponry to Israel, Saudis in Wake of Nuke Deal…

TOP BRASS: Deal INCREASES Likelihood of War…

You give the most belligerent and ideologically crazed nation in the Middle East the right to build nuclear weapons, and what else can you expect other than an increased likelihood of war. If we thought the twentieth century was the bloodiest in history, wait till we count up the dead at the end of this one.

Waffle Street the movie is coming

Posted on by
Reply

Waffle Street the book is a true life adventure in which the author learns about the meaning of Say’s Law by going from an investment house to working the night shift at a Waffle House. Waffle Street the movie is now about to be released which, as it says, is based on a true story along the lines, no doubt, of what is found in the book. I have been following both book and movie from the start, and while I cannot take even an ounce of credit for any of it, I have to admit there is a very great pleasure in being able to tell you that my Say’s Law and the Keynesian Revolution is sitting on Jimmy’s desk in the final scene, right beneath a copy of Jean-Baptiste Say’s Treatise on Political Economy. To understand why you will probably have to read the book, which along with a great story will explain to you the meaning and significance of Say’s Law. But for a movie in the true Hollywood style, you should see the film as well when it comes out. How extraordinary it must also be for Jimmy Adams to find that being fired from his job in finance led to his ending up writing a book that was turned into a movie with Jimmy himself played by James Lafferty!

UPDATE: I’ve just had a look at the interview with Jimmy linked at the start. A good question from the interviewer, which led to this reply drenched in the logic of Say’s Law:

Too often, white-collar financial service workers forget that any given good or service can only be obtained by 1) producing it yourself or 2) by creating something of value which can be exchanged for it. Instead, we’re prone to think the major impediments to our individual and collective prosperity can be readily removed by tweaking interest rates, the tax code, or deficit spending.

My restaurant co-workers, in contrast, were under no such delusions. With the exception of the manager, I was the only person working third shift who hadn’t spent considerable time in a state or federal correctional facility. Most of them were extremely grateful for the opportunity to perform honest work at a market wage, and took a very proactive, customer-service-oriented approach to their financial lives after parole. Generally speaking, they were great examples to me. In the book, I use a number of my interactions with them as commonsense illustrations of economic principles. I really intended the narrative to be wholly humorous self-deprecation, but I had so many financial epiphanies on the job that I couldn’t help but share them with my readers.

Hillary’s rules for radicals

Posted on by
Reply

hillary rules for radicals

Speaking of which, why does no one even bother to mention that Hillary’s senior thesis was on Saul Alinsky’s Rules for Radicals. Once upon a time unavailable. Now, it is hardly worth a mention; it is, if anything, a feature and not anything she needs to hide. She has the same genealogy as Obama. If you are interested, you can read it here. You won’t find anything you don’t already know, which is in itself a large part of the problem.

A very dark age coming

Posted on by
Reply

This is a long article by David Solway on Nine Signs of the Impending American Collapse. Written in an end-of-times style, but get past that opening if these are the kinds of things that put you off, and get to the secular version Solway has outlined. There are nine different harbingers for the descent that is about to visit us. Almost prosaically, I will list his very last, which is the presidency of Barack Obama, about which he said this amongst other things:

Under Obama’s nation-withering hand, the land of the free and the home of the brave is fast becoming the land of the hunted and the home of the suborned. Obama is like a Judas goat leading the sheep into the abattoir. If this ruthless minion of the left completes his term successfully according to his intentions, the United States will not recover. It will be fatally riven by internal dissension, infiltrated by avowed enemies and millions of so-called “undocumented workers” and queue-jumpers, drowning in unpayable debt, subject to judicial intimidation and repressive state control, and vulnerable to a host of hostile nations—China, Russia and Iran, to name only the most prominent. It will be game over.

Is it game over? Is all that will remain of the West, the Judaeo-Christian West, be a few enclaves that will need to defend their historic purpose and historic identity? Read Solway’s article only because we are still, for the most part, in the best of times. It won’t last, but for now we have the time and leisure to reflect on what is to come, although, as always, the future cannot be known.