Tag Archives: Interventionism

Should young Americans feel confident about their economic prospects?

Wages of Young Americans (Source: The Atlantic)
Wages of Young Americans (Source: The Atlantic)

Graph: Young People’s Wages Have Fallen Across Industries Between 2007 and 2013.

Young Americans are taking longer to graduate and graduating with more debt, but that’s not all – they aren’t find jobs, and the jobs they do find typically don’t allow them to pay back their loans.

Here’s an article from The Atlantic, which leans left.

Excerpt:

American families are grappling with stagnant wage growth, as the costs of health care, education, and housing continue to climb. But for many of America’s younger workers, “stagnant” wages shouldn’t sound so bad. In fact, they might sound like a massive raise.

Since the Great Recession struck in 2007, the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except for health care.

These numbers come from an analysis of the Census Current Population Surveyby Konrad Mugglestone, an economist with Young Invincibles.

In retail, wholesale, leisure, and hospitality—which together employ more than one quarter of this age group—real wages have fallen more than 10 percent since 2007. To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twentysomethings pass into their thirties, they are earning less than their older peers did before the recession.

The picture isn’t much better for the youngest group of workers between 18 and 24. Besides health care, the industries employing the vast majority of part-time students and recent graduates are also watching wages fall behind inflation. (40 percent of this group is enrolled in college.)

It’s not just that – the Democrats are doing a pretty good job of wrecking other parts of the economy, from energy development to health care to entitlement programs to college tuition, which rises higher as government throws more money into the system. They are doing everything they can to wreck the economy with higher taxes and burdensome regulations.

As a result of our headlong rush towards socialism, the U.S. economy has now fallen to number 2 in the worldbehind China.

Look:

We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.

This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.

So things are bad for young people, and it’s going to get worse.

It’s important to check what major you are studying to make sure you get a return on your investment, and don’t be scared to study something you hate if it means that you can make your career work. Your education and career choices are not about fulfillment and thrills. You have to make hard choices in order to make ends meet so that you have freedom to do the things you ought to do, especially if you want to get married and start a family. Those marriage and family plans start the day you step into high school, in my opinion.

UPDATE: 17.7% Teen Unemployment in America – Still Above Rate of 6 Years Ago and Labor Force Participation Remains at 36-Year Low.

Egan Jones cuts U.S. credit rating again, this time from AA to AA-

Story from CNBC.

Excerpt:

Ratings firm Egan-Jones cut its credit rating on the U.S. government to “AA-” from “AA,” citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country’s credit quality.

The Fed on Thursday said it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market.

In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.’s real gross domestic product, but reduces the value of the dollar.

In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.

In April, Egan-Jones cuts the U.S. credit rating to “AA” from “AA+” with a negative watch, citing a lack of progress in cutting the mounting federal debt.

Moody’s Investors Service currently rates the United States Aaa, Fitch rates the country AAA, and Standard & Poor’s rates the country AA-plus. All three of those ratings have a negative outlook.

Could this have anything to do with the decision to print $40 billion a month to “stimulate” the economy? Once you’ve given up on letting businesses create jobs by lowering their taxes and removing burdensome regulations, then printing money is all you have left. But no one mistakes that for economic growth, least of all credit rating agencies.

Philosopher Ron Nash lectures on capitalism, morality and freedom

Watch the lecture. (H/T Luis)

Nash speaks from 0:06 to0:45. Then he takes questions.

His two favorite economists are… WALTER WILLIAMS and THOMAS SOWELL! Just like me!

Christianity isn’t something you do in church to have happy feelings, or to get along with your parents and friends. It’s a worldview. And the whole point of it is that is is true, and helps us to make sense of the world because it is true.

By the way, he even talks about how Jesus uses hyperbole to get people’s attention in the question and answer time. I blogged about that a while back because one of our Christian commenters told me that Jesus never uses hyperbole. (She is a Calvinist, so… you know… ). F.A. Hayek also comes up in the Q&A time. Hayek is my third favorite economist. I think all Christians should have favorite economists. I think we should think about how Christianity relates to every area, from science to history to philosophy to ethics to marriage and family. And to politics and economics, as with this lecture!

We should all have favorite scholars, just like non-Christians have favorite musicians and movie stars. Ron Nash is one of my favorite philosophers.

Who is Ron Nash?

I learned about economics by listening to all the lectures in this course taught by Dr. Nash. He presents a view of economics that is consistent with the laws of logic and the Bible. And this course is comprehensive. I’ve moved on from Dr. Nash’s course to read F. A. Hayek and Thomas Sowell, and then Walter Williams. And I found that Dr. Nash’s course was excellent preparation for these more advanced books.

Take a look at some of the topics:

  • the role of the government in regulating commerce
  • the meaning of justice
  • capitalism and socialism
  • interventionism vs free market capitalism
  • introduction to economics
  • marxism
  • wealth and poverty
  • liberation theology and the religious left
  • judicial activism vs legal positivism
  • pollution
  • public education

You can grab the lectures here.

A little blurb about Dr. Nash

Nash taught theology and philosophy for four decades at three schools. He was chairman of the department of philosophy and religion and director of graduate studies in humanities at Western Kentucky University, where he was on faculty from 1964-91. He was a professor at Reformed Theological Seminary from 1991-2002 and at Southern Baptist Theological Seminary from 1998-2005.

Nash wrote more than 35 books on philosophy, theology and apologetics, including “Faith & Reason: Searching for a Rational Faith,” “Life’s Ultimate Questions” and “Is Jesus the Only Savior?” Nash received his Ph.D. from Syracuse University; his master’s degree from Brown University; and his undergraduate degree from Barrington College.

From this Baptist Press article.

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Why libertarians should care about the breakdown of the family

Stephen Baskerville explains how the breakdown of marriage leads to bigger government and less liberty.

Excerpt:

Unmarried women and single mothers (the main abortion constituency) are more affluent and better-educated than two decades ago.  They are also more politicized and comprise Obama’s most committed and vocal supporters, having voted for him by 70%.

As with many measures designed to weaken the family, no general public clamor preceded the move to nationalize medicine, apart from a few vocal constituencies.  One of the biggest was single women.  “American voters in general may shy away from ‘radical’ steps such as importing a Canadian-style (health care) system,” the liberal polling firm Greenberg Quinlan Rosner reported some years ago.  “Unmarried women, however, embrace such a powerful step.”

[…]Sadly, many unmarried women live — willingly or not — to some degree in dependency on the state. And for single, middle-class women whose incomes disqualify them for Medicaid, health care is the most expensive cost.

[…]Statistics now reveal that welfare has been a powerful force behind the break-up of the family in low-income families. Now, in the middle class, we see the breakdown coming largely through divorce and the “liberated” lifestyles to which much of it can be attributed. Yet our growing allegiance to an ever-increasing culture of divorce now demands ever-expanding “services,” such as government medicine.

So, public medicine, like all welfare, facilitates family dissolution. And the breakdown of the family in turn creates a constituency pushing for more welfare, fostering a vicious circle of government growth and social decay.  It just so happens that all of this also builds electoral support for the party that enacts it.

Libertarians need to be practical: you need social conservatives and you ought to be actively promoting traditional marriage.

Why Canada’s response to the recession saved more jobs

Here’s an amazing post from Ed Morrisey of Hot Air. (H/T Muddling)

Excerpt:

Barack Obama likes to tell people that we should thank him for his interventionist economic policies, and that without them, unemployment would be much worse in the US than it is now.  For instance, he told Racine that without his economic stimulus, we’d be at 12, 13, even 15% — even though Racine itself is at 14.2% unemployment.  D’oh! Otherwise, this looks like a classic Churchill conundrum.  Had the UK elected Winston Churchill as Prime Minister in 1936 and he fought Hitler early, forcing him from power, would Churchill have gotten credit for saving Western civilization?  Or would he have been seen as a war monger, without the context of tens of millions of dead people in World War II?

Actually, we can test the hypothesis in this case, at least to some extent.  The financial collapse also battered our northern neighbor, Canada, although not quite to the same extent it did us.  (Canada has more conservative banking and lending policies, which shielded them from the worst of the problems.)  Instead of using a blizzard of government spending to correct a downturn in unemployment, Canada tightened its belt and rode it out.

So how do the two compare?

Here’s Canada’s employment chart from their Statistics Canada web site – it shows how many thousands of people are employed.

Source: Statistics Canada
Source: Statistics Canada

Where’s the recession? There is no recession in Canada.

And they say:

Employment rose by 93,000 in June, pushing the unemployment rate down 0.2 percentage points to 7.9%. This is the first time the rate has been below the 8% mark since January 2009.

Employment has been on an upward trend since July 2009, increasing by 403,000 (+2.4%). These gains offset nearly all the employment losses observed during the labour market downturn which began in the fall of 2008. The June unemployment rate, however, remained well above the October 2008 rate of 6.2%, due to a large increase in the number of people in the labour force over this period.

Yeah – they actually delivered the sub-8% unemployment rate that Obama promised and failed to deliver. And Ed hazards a guess as to why that may be.

He writes:

For those who have trouble recognizing it, that’s what a recovery looks like.  Canada’s job creation really has gone in the right direction, not simply plateaued at the nadir of the curve.  Maybe Canada’s private sector has been hiring because it doesn’t have to worry about the price signals of the massive government interventions created by the Obama administration that the US private sector has to deal with.

We talked before about how businesses fear “bold experimentation” in economic policy from an interventionist government. That’s the kind of thing that causes depressions, by the way.

Canada’s unemployment rate started off HIGHER than ours, and it is not LOWER than ours. How can that be? Their economy is dependent on us! Well, they didn’t act to “stimulate” the economy with massive government spending, and they’ve been signing free trade deals with everybody and their mother in order to diversify their trading so that we don’t take them down with us. And it’s working. Prime Minister Stephen Harper is an F.A. Hayek conservative, not a J.M. Keynes liberal. He doesn’t believe in deficit spending.

Ah, the benefits of electing an economist to run your country, instead of a demagogue community organizer who sues banks and wants to “spread the wealth”.