Children’s books

Two children’s-book related stories here. The first School librarian rejects Melania Trump’s donation of ‘racist propaganda’ (aka Dr. Seuss books).

Earlier this month, the first lady sent out collections of 10 Dr. Seuss books to one school in each state to mark National Read a Book Day.

In a letter published on the Horn Book’s Family Reading blog, Cambridgeport Elementary School librarian Liz Phipps Soeiro said that her school wasn’t in need of the books, which included famous titles such as “The Cat in the Hat.”

“I work in a district that has plenty of resources, which contributes directly to ‘excellence,’” she wrote. “My students have access to a school library with over nine thousand volumes and a librarian with a graduate degree in library science.”

Instead, she wrote, the White House should worry more about providing support to schools that are underfunded and subject to government neglect.

“Why not go out of your way to gift books to underfunded and underprivileged communities that continue to be marginalized and maligned by policies put in place by Secretary of Education Betsy DeVos?” she wrote.

A moron of the most typical kind, but now an icon of the left because of her vacuous hatreds based on nothing at all other than the emptiness in her life. But let us also recall this small touch at the end at the link:

Soeiro did not note that former President Barack Obama and First Lady Michelle Obama both read Dr. Seuss books to children several times during their eight years in the White House.

There’s even more. She has even been photographed displaying The Cat in the Hat! which I have taken from Mark Steyn.

It’s not even hypocrisy. She is just a stupid woman with nothing else in her life other than the useless partisanship of her comrades on the left.

I suspect this would be more her kind of literature even though it’s not in English: New Swedish children’s book: Grandpa has four wives.

There’s a new world coming. In the meantime, if you are looking for some children’s literature, let me recommend Economics for Infants. I doubt it would make it past the librarian at Cambridgeport Elementary School even though she is in need of it more than most.

Fifth anniversary

Blogging is for people who are sick of shouting at the TV set. Not much more satisfaction but at least you get to share it with others. I went back and looked at the first three posts I put up and I can see a certain kind of stability in my frustrations that trigger a post. The first one was titled, Cranks and crazies everywhere about government spending:

Here in Australia the Government pretends that it has some kind of strategy for getting the budget back into surplus of which two things may be said. The first is that – although in its words alone and not be its actions – by making the commitments they have made Gillard and Swan have at least recognised getting the budget into surplus is actually something that ought to be done. If there are therefore any cranks and crazies around in the US, it is the people who have been complicit in allowing the level of debt to rise to $US16 trillion with not a strategy in sight to bring it back down or, indeed, even to reverse its upwards course. What do our PM and Treasurer think of an Obama administration that has not presented a budget to Congress in three years? For Republicans to try to get some kind of fiscal action out of a Democrat Senate is just what anyone with sense would want them to do. If there are cranks and crazies around in the US, they are almost entirely found on the Democrat side of the aisle.

But the second matter shown by our leadership team is to see just how badly these people have mangled the one economy that has been in their charge. Handed not just a deficit free economy but an economy entirely free of debt, handed on a plate a mining boom designed to feed into a Chinese boom, they have managed in just five years to create massive debt and are about to oversee this forecast fall in living standards which is anyway evident in the shrinking of the private sector at the present time.

The second oldest post was about the American election, which have fascinated me all my life. My policy consistency is remarkable to myself, since from Kennedy to Reagan to Trump I have sought the same thing. This one was on Romney had already written about the 47% in his book published in 2010.

There has been quite a bit of focus on Mitt Romney’s having mentioned that 47% of the American population do not pay income taxes. And much of the commentary has been that he made the comment behind closed doors and out of hearing of most of the population. But the fact is that Romney had made the same comment and had made the same point in his book, No Apology, which was published in 2010.

Not that it mattered to anyone, least of all his fellow Republicans who were quite content, even then, to be a pretend opposition. Trump has exposed it all but most people in politics aren’t actually interested in policy. And the third of those early posts I will bring back is about Keynesian theory versus the classics, an old theme. Interesting, though, that this was a revelation to me even as recent as five years ago, put under the heading: Saving and Investment.

The deficits and debts we see around us everywhere are a consequence of a Keynesian model which has been fashioned on the belief that there is some means to conjure goods and services into existence merely by spending money to buy them. It is such a hopelessly false idea, but since something like 95% of the world’s economists believe this stuff, or at least have never stopped to think about it, on they go, advising governments to take actions to create demand for 105% of everything available for sale.

And because governments get first dibs at what’s available since they get to print the money they are buying things with, they don’t notice that there are no savings to back up the demands they make. It is the private sector that finds itself unable to grow and employ since the inputs they would normally have put to use have been already taken up by governments. But since economic theory tells governments this is the right thing to do even when common sense should tell them that it’s not, on they go, creating a wreck of any economy where this Keynesian stuff is being tried.

I’m afraid there is no helping it. We are going to have to abandon this demand side Keynesian view of things and return to the classics.

Anyway, progress does get made. Trump is president and Keynesian theory is rotting on the vine.

But this is still in large part a blog for me to communicate with family: Hi Joshi. And hi to the rest of you as well.

Will you still love me tomorrow?

I came from an era in which casual sex never happened. The pill changed it all, but so too did “The Playboy Philosophy”. Written in the early 1960s, it is Hugh Hefner’s contribution to the decadence of our own time. It has been the twentieth century’s most important contribution to philosophy and culture. The one and only rule about sexual relations is that other than monitoring the ages of those who are involved, there are no rules. There was a time when people knew what was wrong with the Playboy Philosophy – we read it in the same spirit that we read Abbie Hoffman’s Steal this Book – but those times are long gone. Sex without responsibility and attachment is a kind of adolescent boy’s dream come true. But as we have since discovered, sexual anarchy is the worst of all possible worlds. So to the song:

As the story goes, it was first offered to Johnny Mathis; Columbia Records boss Mitch Miller is said to have blackballed the song, claiming it was immoral. Dawn Eden might think ol’ Mitch may have been on to something:

Like many songs from that more innocent era, “Will You Love Me Tomorrow” expresses feelings that most people would be too embarrassed to verbalize. There’s something painful about the way its vulnerable narrator leaves herself wide open. Yet, even though her asking the song’s title question implies a certain amount of courage, it’s clear that she’s ready to accept a positive answer without questioning it — which is not surprising, given the lyrics’ description of how the evening has progressed. By the time one is worrying about how the other person will feel tomorrow, it is usually too late.

For most unattached single women in New York City, and I would imagine much of the rest of the country as well, casual sex is the norm. It’s encouraged by all the women’s magazines and television shows from “Oprah” on down, as well as films, music, and the culture in general. And while “love” is celebrated, women are told that they should not demand to be loved tomorrow — only respected.

If it’s encouraged for women, it’s almost mandatory for men; a woman who is not sexually active is pitied, while a man who is not sexually active is mocked and ridiculed. (Which may be one reason why very few men — Frankie Valli is one who did — ever recorded this song.) “Tell me now, and I won’t ask again” turns out to be a variation on a theme by Scarlett O’Hara: “I’ll think about that tomorrow.”

This is a song from the 1960s written by Carole King but is the lament of many a woman of our own times. The way the song is presented in the video above by the Shirelles, who sang it originally, you would not know it is the saddest imaginable song with a sadder still message. Perhaps the Amy Winehouse version is truer to its meaning if for no other reason than that she herself had the saddest life. Here are the words with a message that can hardly even be registered by many inside our own decaying culture.

“Will You Love Me Tomorrow”

Tonight you’re mine completely
You give your love so sweetly
Tonight the light of love is in your eyes
But will you love me tomorrow

Is this a lasting treasure
Or just a moment’s pleasure
Can I believe the magic of your sighs
Will you still love me tomorrow

Tonight with words unspoken
You say that I’m the only one
But will my heart be broken
When the night meets the morning sun

I’d like to know that your love
Is love I can be sure of
So tell me now and I won’t ask again
Will you still love me tomorrow
Will you still love me tomorrow
Will you still love me tomorrow
Will you still love me tomorrow

Pick-up artists and the hook-up culture are the way of the world. A friend of mine’s nineteen year old daughter just put Tinder onto her phone. My friend is hopeful that it will be all right, but if it will be, it will only be by the greatest good fortune since the culture will no longer look after her daughter nor give her sound advice. The best that can be hoped for is to get through your twenties with no major disasters. How it can be done today is to me an unknown.

Hugh Hefner has now gone to God at age 91. Of most interest to me is that although surrounded by the most beautiful women through the whole of his adult life, he lamented at the end that though surrounded by one “playmate” after another, he never found his soulmate. His question was the opposite from that found in the song, his question was will I still love you tomorrow, and that, my friend, is the only question worth asking.

[The basic theme is from The Other McCain where the link is found.]

The productive horse must come before the spending cart

These are selected comments that followed Per Bylund’s article on the Mises website where he discussed More Spending does not Drive more Employment. I have emphasised those that supported Per’s argument. I will provide a bit of a commentary to see where things are going. I might add that the one and only text that carries all of this at an introductory level is my Free Market Economics now in its third edition.

A discussion on the use of our resource base in maintaining and building capital

Diane Merriam: Maintaining anything is still a cost, so it still needs a market.

Demand equals supply at a given price. Without the price mechanism demand can be infinite and supply zero.

There have been too many cases, when it’s only government involved, that haven’t been far off from that case … think the Bridge to Nowhere :). If maintenance of something *is* going to be done, there’s still a market for getting it done.

The only value available for investment is value that hasn’t been spent on current consumption.

It doesn’t matter how much how many people work, how hard, how much they invest, any of it. If what they produce isn’t what people want at the price it is offered for, it has *no* value. Value is assigned by the purchaser and, even then, only at the time of any specific exchange. You can’t simply put a price tag on something and say that is what it’s worth. If people won’t buy it at that price, then it’s *not* worth the price.

All business decisions are forward looking with no guarantee ever of a positive return

Q: What do you think: “…when business people see a profit opportunity. …” means?

DM: [Businesses] may *think* they see a market opportunity. But more often than not, when a new product or more of an old one actually gets to the market, they find they were wrong.

Q: You should have more faith in our private sector job creators.

DM: I don’t have faith that they will do any better than they already are. The FACT is that most new businesses and even large expansion of existing businesses FAIL. If they could reliably predict what will and won’t sell for how much, they would already be doing it. They can’t. Distortions of the market will make analysis even harder, resulting in even *higher* rates of failures than now.

Value added is what matters most

Q: But if there are people available to work, the business person will hire them and create MORE VALUE.

DM: Again, it doesn’t matter how many people are working. Unless what they produce is worth the price it’s offered at to the final buyers, *no* value was created.

There is *no* demand until *after* something is created. Every investment is a risk because of that very basic fact. And once something is created, there is still no guarantee that people will want to buy it, much less at more than the total cost of making it, or even enough more that a business wants to keep making it.

*Risk* is the defining characteristic of *any* investment. A consumer saying “I want something” means next to nothing economically. Even “I want something particular at less than this price at this specific moment given what else I could buy and also want” says nothing about what that consumer will want tomorrow or what they’re willing to pay for it tomorrow or that something new will not come out such that they don’t want any more of what they bought today afterwards.

Even then you’ve only scratched the surface of risk evaluation. As a business person, it’s not only guessing at what demand might be tomorrow or next year and at what price. What if the minimum wage goes up another 80 or 90%? What if the cost of this or that material needed to make what I produce goes up? If I want to invest my current available savings (or even what I can borrow) in product A, what will that do to my line of product B? What if inflation jumps back up again or interest rates go up? I see all this “new” money floating around and I know that is going to increase inflation and interest rates. By how much? How soon? For how long? I see a lot of cost increases coming down the road and I see that what I earn is going to be worth less than it is now. Can I risk even expanding current production? Can I afford to lose what it’s going to cost?

And even after all that analysis, most new businesses *still* fail.

All production is driven by entrepreneurs and not by those who might buy the product after it has been produced

Q: What about if consumers wave money in front of the noses of the job creatos and say “wakey wakey”

DM: The business owner would look at them and know that *they* are wakey wakey and have no idea what they’re talking about. Business owner looks at what they say they want, then how much they are willing to pay for it, then sees what the potential upside *and* downside is, then looks at costs and what they can afford to invest and what they can afford to lose if it doesn’t work out. By the time it’s all said and done, what people say quite often doesn’t work out in the real world.

The normal progression for business that open simply on the basis of what people say they want is funds invested, attempts made, followed within a year or three by bankruptcy. It’s just not that simple.

“For every complex problem there is an answer that is clear, simple, and wrong.” – H. L. Mencken

Look at the three states, I think it is now, who tried to implement a single payer plan … until they got the dollar figures on what it was actually going to cost, and that was under best case scenarios. All three attempts just quietly went away.

Simply because some people say they want something doesn’t mean it’s the right or affordable thing to make.

Jobs are not created by spending

Phil Miller: “The jobs are created by spending”

Jobs are created by entrepreneurs who take risks to satisfy consumer wants. You can’t have spending unless you have entrepreneurs first taking risks and producing products. You’ve got the cart in front of the horse.

Q: “Value and wealth are created by entrepreneurs and indeed money if they borrow it.”

PM: Wealth must first be created before it can be borrowed. You can’t borrow something that doesn’t exist.

Understanding the meaning of wealth and wealth creation

DM: Wealth does not equal value. Wealth is nothing but a numerical accounting of the assumed value that a person or business has at their disposal to spend or invest. It’s one of those loose words, along with others like inflation and money, that make it easy to obfuscate economic understanding among the general populace (and even many economists).

Of course entrepreneurs can’t create money. Neither can governments or anyone else. First the value has to be created. *Then* that value can be traded, either directly (as in barter) or indirectly (using an generally accepted form of value storage called money).

You can throw trillions of pieces of paper around and not one job will ever be created. Without the intermediary steps of deferred consumption (savings) and risk taking entrepreneurs you have nothing.

Money, in the formal definition, must be an actual commodity that has value in and of itself. The best commodities to use are durable, have high value per volume, are easily divisible, and do not *need* to be consumed.

Paper currency, when it is a claim on actual money, makes it even easier to use as long as the receiving party trusts that the actual money is and will always be available upon demand. When that convertibility is taken away, a major trust support is lost. Even the value as an intermediary of exchange becomes subject to the whim of the printer. If the printer prints more, then prices have to go up. Which prices go up and by how much can be any mix of end user prices and/or investment vehicles and everything in between. More paper, in and of itself, does not and can not create value.

Production comes first and demand only later

Leopardpm: It is just pure crazy that their are still folks in the world that are so confused as to think that ‘spending’ precedes production or increases demand. All one has to do is reduce the economy down to 1 or 2 folks and see how things work – this strips away the myriad of confusing layers and distractions which seem to plague peoples minds.

These people completely lose their ability to think just because a fiat currency is introduced into the equation, as if it acts as some magical incentive to drive folks all ‘wakey wakey’ in their search for wealth.

It is simply a logical impossibility for spending to drive the economy, no matter what a study may conclude or a person may ‘feel’ should happen…

Entrepreneurs are a breed apart and do not need to be coddled to get them to produce

DM: Entrepreneurs do not need a *good* economic climate, but they do need one that at least makes profit possible. The worse the climate, the worse the returns and therefore the less the growth that investment will result in.

Leopardpm: Suppose you and another person are in a forest and he has an item you desire and you have nothing that he values to trade for it – can you simply ‘spend’ to obtain it, or do you need to produce something first in order to trade for it?

Even though way over-simplified, it still highlights the underlying, fundamental point: someone, somewhere, somehow must first produce something before it can be ‘spent’. Debt can alter the time frame (ie: you could trade a debt for the item, but that debt must either be repaid or any future ability to trade debt will be greatly devalued), but not the principle.

Why do you insist that I am creating a strawman here? This article is about creating employment through spending, and it follows that it also is referring to the greater thought of ‘Spending drives the economy’… my ‘strawman’ is both of these….

“Your claim that there is someone claiming that spending preceeds production is just childish.” You must not get out much – the idea that spending proceeds production and thus is the main driver in the economy is repeated throughout the media and economic circles: “Spending accounts for 70-80% of the economy (or economic growth)” etc… perhaps you are not understanding the concept, or maybe do not hear what is said by the news et al?

Structure of production

Bob Robert: Your failure is in not understanding the structure of production.

In order to be used to build final products, the “capital” machines must be produced. Production precedes consumption.

In order to be used to produce the machines, the “capital” factories must be produced. Production precedes consumption.

In order to be used to build the factories, the “capital” bricks, iron, flywheels, electrical generators, and on and on endlessly (see: I, Pencil) must be produced. Production precedes consumption.

In order to be used to build all those things, the “capital” of individual laborers must be produced. Production precedes consumption.

It’s called “structure of production”, and it is something which both Marx and Keynes ignored utterly.

Summing up

Noah: ” the entrepreneur will employ people before demand is known — in fact, even before demand can be known”

Exactly. Well phrased.

” capital replaces labor (by making it more productive) ”

Which is represented by the “good” form of wealth inequality, since the return on output logically returns to the capital that is increasingly invested in greater proportion than to the labor that is reduced. Both the rich and poor get richer in real terms, but the return on investment/capital (that is replacing labor to increase output) means the rich get richer at a faster pace than the poor get richer.

What’s the problem, if this system is actually allowed to work (which it increasingly is not) under limited credit expansion? Unlimited credit expansion means ONLY the rich get richer, at least in nominal terms.

“the Keynesian avalanche”

What a wonderful phrase! This is very good article in the realm of those that show production/supply is primary over consumption/demand (rather than the other way around, as the the Keynesian avalanche led many to believe.

Perhaps too scattered as all such conversations are but an interesting and quite high level discussion.

The twentieth century’s most influential philosopher has passed away

The twentieth century’s most influential philosopher has passed away at 91. I remember when The Playboy Philosophy was being serialised in the magazine. I especially recall passing one of the many episodes around maths class, all of us thinking if only a world like this could come to pass. And you know what, it did come to pass and more comprehensively than anyone could have imagined, but by then I was no longer 14 years old. It has done endless harm to both men and women, making the stability of the family now all but unachievable, and added a new dimension to human unhappiness. It has now come down to where the only freedom for many is sexual freedom, but that apparently is good enough for them.

For those of us who only read the mag for the articles, let me bring this to your attention if you haven’t read it before: Donald Trump’s Playboy Interview. You can see why he’s president while also seeing that he, too, is from that era long ago before the Playboy Philosophy became the foundation and point of origin for Third Wave Feminism.

Crony capitalism in action

A Keynesian stimulus is nothing other than a way for our elites to reward each other with other people’s money. This is a story that ought to lay bare what you need to know about public sector spending where the pretence is made that the stimulus is to help those at the bottom of the income pile. Here is the reality: Most Americans Still Worse Off Than Before Recession, Fed Finds.

Newly released income and wealth data from the Federal Reserve Board’s triennial Survey of Consumer Finances show that America’s richest families enjoyed gains in income and net worth over the last decade. Not part of the top 10 percent? Then your income probably fell. The data show that families ranked in the highest percentile saw an income gain of $16,300 from 2007 to 2016. Those below are still making less money.

A government has very poor judgement on what is value adding for a community but is absolutely perfect in being able to reward their friends.

RMIT is the George Mason of the South

It was certainly never intended that way but the School of Economics, Finance and Marketing at RMIT has become one of the great free market universities of the world. This has been posted at Instapundit just today following the post you see below on The Blockchain Economy:

INTERNET 4.0: Chris Berg (Australia’s free speech champion), Sinclair Davidson (of Catallaxy Files fame), and Jason Potts have put together The Blockchain Economy: A beginner’s guide to institutional cryptoeconomics. If they’re right, regulators and taxmen have a lot to fear.

And allow me to add myself into this equation. I presented my paper on Tuesday on “Classical Economic Theory Explained” which discussed the many many many things wrong with Keynesian macro – that is, all of modern macro – that the classics got right. And while the number of people who get this is quite small at the moment it is not quite zero and the numbers are growing. Therefore, let me refer you to this paper by Per Bylund More Spending Does Not Drive More Employment in which the following passage may be found:

Economists prior to the Keynesian avalanche, which contemporary Say’s Law scholar Steve Kates argues was all about dismissing the organic view of the market economy, had the same understanding of the economy as Mises. What drives the economy is not demand or spending, but entrepreneurship and production.

Indeed, JS Mill famously notes that “Demand for commodities is not demand for labour” in his fourth fundamental proposition on capital. While this statement is subject to much debate and most modern economists cannot make sense of it, it is in effect very straight-forward if one recognizes the role of entrepreneurs.

And if you want to want to read about Mill’s Fourth Proposition, you can go here. This was its first defence in more than a century but as said by Leslie Stephen in 1876, “it is the best test of a sound economist”.