Why Does Economy Feels So Bad When the Numbers Are So Good?

Apart from the very real possibility that the numbers are rigged and bogus, the answer is that the numbers are meaningless.

Here is why:

Take the case of a young single person, earning, for example, $500 a week and say that his pay a few years later has gone up by 20% or $100 a week.  But if, in addition to paying more taxes on his $600 weekly earnings, he then has and is supporting a wife and three or four children, he obviously is worse, and not better off economically.

That, in a nutshell, is why growth in the nation's gross domestic product (GDP) is meaningless to most Americans.  Their individual shares of the GDP have been shrinking for decades and in recent years they have been and currently are shrinking faster than ever.

American citizens, on average, will be better off financially only if their after-tax shares of the nation's GDP increase -- in other words if dividing the nation's GDP by the number of citizens produces a higher net per capita (or per person) GDP.  That can happen only if the nation's GDP rises at a rate higher than the rate at which its population increases.

Even our inside-the-beltway dullards are awakening to the fact that the U.S. economy is growing too slowly.  But that dawning is unlikely to result in anything other than counterproductive actions.  Understanding this reality requires an understanding of the components of the GDP:

GDP = C + G + I + NX

where C is equal to all private consumption (consumer spending in the private economy), G is the sum of all government spending, I is the sum of all business spending on capital, and NX is all exports minus all imports.  

Decades of growth in government and government spending, and their recent explosive growth have resulted in severely eroding confidence and the curtailment of expanded private consumption.  This is necessarily so because government can only spend what it extracts from private individuals and businesses either through taxes or burdening them with debt.  In either case, the private sector is less willing and able to spend.

A future post will go into the details of the foregoing in greater deal but for now your not-at-all-humble blogger will offer only the following abreviated explanation of the above-stated conclusion that the government will not act in a way that would have a positive effect on the economy:  Anything the government does almost certainly will result in more government, more government action, and more government spending -- the equivalent of shackling weights to a drowning man -- rather than doing less and thus freeing the man to climb out of the swamp.

Reflecting on Tax Day

Obama's Singular Achievement

While degrading America's military strength to the point that it no longer is adequate to protect that nation's overseas interests or to counter international threats, the current administration, by adopting Jimmy Carter's policy of talking strongly while carrying a feather duster, has created something new in the history of our country:

America today is no longer

trusted by its friends,

feared by its enemies, or 

respected by anyone.

Congratulations and thank you Mr. Obama, Mr. Kerry, and Mrs. Clinton!

Above-the-Law Judges Beneath Contempt

A panel of federal appeals court judges has again ruled that they and their fellow black robe wearers are above the law.  They have anointed themselves as a unique special class exempt from any legal consequences irrespective of how unlawful and reprehensible their official conduct or the harm it inflicts on less favored individuals.

A report on the most recent example of this self-serving  decision and some of its horrific precedents can be found here.

The argument for the exemption from accountability is that judges must be free to act as they deem best without having to fear any personal consequences.  That would be a fair socially benefit argument had the courts not eliminated similar exemptions from liability from others who in their professional capacities act for the benefit of society.

Consider as examples soldiers in combat, law enforcement officers, and physicians and surgeons.  In fact, individuals serving in those capacities have a better case for exemptions from personal legal liability for any transgressions.  Unlike judges, they have to decide how to act, and to implement their decisions on the spur of the moment and on the basis of incomplete and inaccurate information while under great stress in life-or-death situations.

Judges on the other hand have the luxurious benefit of being able to study, reflect on and consider, and decide on matters before them when they choose to do so. Furthermore, the judicial process gives them the obligation and power to demand that they be presented with accurate and complete information before making a decision.   

Bottom line is that the black robed folks are called honorable but they are not.  They make rules for lesser mortals but when it comes to themselves JUSTICE MEANS JUST US!

Tomorrow Is Dependence Day

It's About Control: the Freedom Curbing Imperative

Following up on the preceding post, the harsh penalties imposed on those who deny goods or services to individuals and events as a matter of personal choice are not motivated by a desire to make the product or service available to the refused potential customer.  In America, alternate suppliers always are available to provide the desired product or service.

Instead, the penalties are draconian as a control measure.  They are to punish anyone who refuses to toe the current politically correct line . . . anyone who insists on exercising his or her rights as a free individual by refusing to meekly submit to the control of society's self righteous elitist overlords.

Freedom might be infectious.  It therefore cannot be tolerated and must be crushed.

Tolerance For Everything But Freedom

 Discrimination, notwithstanding the current mindless onslaught against it, is a bedrock of individual liberty.  It cannot be eliminated.  Every human -- and, in fact, every living thing  -- constantly practices discrimination.

We discriminate when we select foods and drinks to consume (and which to eschew) from a vast array of available choices, when we choose which books to read, which films, television program and plays to see, broadcast programs and music to hear, products to consume, and commercial establishments to patronize.

We discriminate when we choose friends and others with whom to associate as well as whom to date and wed. 

Few of us would find life worth living without the freedom to make these discriminatory choices, and especially the last of the above-listed associational examples.

The freedom of association -- to associate with individuals we choose -- also necessarily includes the freedom to not associate with those we prefer to avoid.

There was a time in the not too distant past that the freedom of not associating was protected by the posting in many commercial establishments of signs proclaiming:

We Reserve the Right

to Refuse Service

to Anyone

Society found it necessary to limit that right because its exercise often made it impossible for members of disfavored minorities to obtain housing, adequate education, and essential public accommodations and services such as rooms, food and drink, and transportation.  And the resulting limits on denials of those things have been laudatory . . . until recently.

Overbearing bureaucrats once again are demonstrating that even good ideas can be pushed to counterproductive and even destructive extremes.  

That, for example, is what has been taking place as public (though unelected) bodies operating as "equal rights" enforcers have been coming down on the proprietors of small bakeries and catering businesses for refusing to provide goods or services to homosexual nuptials.  Such refusals of business are hardly the equivalent of denying essential goods or services to a member of a racial or ethnic minority.  The desired wedding cake or catering service is not an essential of life and is almost always available from competing businesses and alternate sources.

Nonetheless noncompliance with the bureaucratic dictates and edicts have resulted in fines so draconian that they have caused the small businesses to fail or shut down.  In addition, the proprietors and their employees have been compelled to participate in sensitivity training sessions -- forced reeducation programs along the lines envisioned by George Orwell in 1984 and actually put into practice by Stalin in the Soviet Union, Mao Tse-Tung in China, and Pol Pot in Cambodia.

If the proprietor of a business (other than one dealing in the basic essentials of life) chooses, to forgo doing business with anyone, he or she should be left alone to do so.  The reason for making such a choice is not the business of anone else.  It can be based on individual conscience, religious beliefs, personal preference, just feeling cranky, any other reason, or even personal whim or no reason at all.  That's what the freedom of association, the freedom to discriminate, is all about.

In addition, there's that pesky prohibition of involuntary servitude enshrined in and protected by the Constitution's 13th Amendment.