We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Samizdata quote of the day “All the available Keynesian levers for achieving economic growth have been pulled, yet the recovery is one of the weakest since World War II. The problem lies with the way the “stimulus” was carried out, the uncertainty of looming higher taxes, and the antibusiness rhetoric and regulatory strong-arming of this administration.”
– Harvey Golub, Wall Street Journal.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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Not to gainsay Mr. Golub’s critique, but rather to add:
“The Problem,” he refers to runs much deeper than current events or politics (which are savagely adverse).
Since 1965 the return on invested assets has been in a long term down-trend, cumulating down over 25% through 2010; now, about 1.6%. ROA has been in a similar decline.
“Savings” (deferred consumption) have been displaced as the major source of “Investments” (net new productive assets) by leveraged “capital” provided through the fractional reserve banking systems; and, to a lesser extent from accumulated surplus earnings (these latter being accumulated for managerially determined applications, generally not redeployed).
“The Problem” for “savings” to find returns commensurate with risks, has led to pricing distortions (the market signals) of tangible assets (real estate, e.g.) and some concentrations into non-productive , but transferable (for liquidity) assets.
Attempts to offset the drift toward “liduidity demand,” through monetary policies, have abetted political fiscal follies that are resulting in capital extractions (via steady, and looming bursting, inflation).
It is on these “sound grounds” that some may hope to lay the foundation for future growth; hope based on the end of current adverse politics. The problem will require something more like driving piles into this swamp; and, even so, it may have the Fate of Venice.
All statists want to be the “new FDR”, and, in many ways, they do manage a pale imitation.
LBJ with his war and Great Society, which led directly to the debacle of the 1970’s, and now the current regime, with its never-enough-ever spending.
After 6 years of the New Deal saving us from the depression, in 1938, almost all major indicators were worse than in 1932.
After 4 years of tarps and stimuli, we have the weakest, read almost invisible, recovery of the last century.
They’re one trick ponies. If times are good, more government. If times are bad, more government. If things get worse, still more government.
The one absolute, iron clad rule of the collective is that the policy elites always know better than ordinary schmoes how to spend the schmoes’ money.
Always, always, always, no matter how many rat holes they fill up, there are always more rats to feed.
What fascinates me is that anyone at all is still surprised by any of this.
Madness.
We Australians have a great economy! 30 years ago, we elected a Labor party into power, but these labourers had some sense! They opened up our economy, rid us of protectionist tariffs, and persuaded the unions to go along with this by promising better times down the track. These were what the other major party, the Liberals, had wanted to do, but hadn’t had the numbers in the Upper house to get these measures through. When Hawke and Keating left office, Howard and Costello, both Liberals, carried through on other reforms. Kevin Rudd gained power by presenting himself as a younger version of Howard. He had mild pretensions to Keynesism, but our economy survived his ‘Stimulus’ package, and most of the good reforms are still in place, despite unions calling for protection. (It also helps that China and other countries want our raw resources, but we were well-prepared to take advantage of that need.)
Everybody knows the best way to fill a bucket is to make as many holes in it as possible and then throw all the water out.
Most reputable main stream economists would confirm this.
I live in a very old house. The electrics have accumulated like strata. Anyway, for the shower there is just outside the bathroom a big chunky switch with a red light – you know the sort. For a couple of years I would religiously turn it on before having a shower. I mean my last place had one which was like a master switch for the shower and my Mum’s house has one and…
Anyway, for some reason we have a ‘trician round and he’s doing his nut because the last re-wring was done by a colour-blind “gifted” amateur (seriously – part but not all of upstairs in order to install anything you have to “reverse the polarity”). Ken, you see would never let a good bit of cable go to waste regardless of it’s colour. Anyhoo it turns out the master switch for the shower turns a small red light on and off and that is it. The shower is on a completely different circuit. I had been flicking this thing off and on without thinking to no end for a couple of years before having a shower. So in “a couple of years” that is of the order of a thousand times.
And that is how I feel about the Keynesian levers of power. People pull them like Skinner’s pigeons peck but they aren’t connected to anything to the purpose.
Nick, the Keynesian levers of power are connected to chutes that funnel available wealth from ordinary guys into the pockets of the con men that run things.
Very effective chutes and levers they are, too.
I have to ask –
‘for the shower there is just outside the bathroom a big chunky switch with a red light – you know the sort. For a couple of years I would religiously turn it on before having a shower. I mean my last place had one which was like a master switch for the shower and my Mum’s house has one and…’
What in the world is the switch FOR ???? Or what is it SUPPOSED to be for ??
You turn on an electrical switch to take a shower ??
A pump to supply the shower is the only thing I can think of but …………..
As the comments have already explained….
The quote is wrong.
The problem is not “the way the stimulus has been carried out”.
It is the whole idea of “monetary and fiscal stimulus” itself.
The idea is nonsense.
But even the WSJ will not (yet) admit that.
JohnB,
I did say “anything to the purpose”. Let’s take a concrete example. I am a sole-trader (IT and related buggerations). Oddly enough this is pretty straight-forward. Now it might be handy for me to take on a young lad or lass and make a company of it but no! It would be nightmarish in it’s complexity (and I am used to “computer says ‘no'”). The biggest jump in business is going sole-trader to employing anyone. It’s a ‘mare. And they wonder about NEETs?
The problem is not that government isn’t helping small business (they all always claim this) but that it isn’t getting out of the way. It’s like (at best) a very friendly puppy and at middling a father-in-law who is constantly saying, “You don’t want to do it like that…” but usually it is just dreadful. All we want is to be left alone. But that doesn’t play politically. They have to say they are “committed to helping small businesses” (for a certain value of “help” obviously) because the alternative which is to say, abolish NI, take everyone earning under 20k a year out of income tax is unthinkable when there are “initiatives” to be initiated and paper-work to be done.
That is the problem with politics. It never ends. That’s how rather than my modest proposal above you get “working families tax credits”. Yes, of course, you can game the system if you do nothing else. And that is the problem. A big enough company can employ professional players of games but I can’t. Neither can any other sole-trader. They have to occassionally do things to the purpose.
Jerry, due to the way the hot water system is done in many/most places in the UK, there is not usually enough pressure in the hot water to run a shower that’s worthwhile. As such, electric showers are often used.
Said plumbing also makes it inadvisable to consume water from the hot water tap for what it’s worth.
@NickM:
Indeed, the ‘hidden’ costs of Employers NI @13.8% is one of the biggest barriers to small businesses. This is a cost of employing someone which doesn’t appear on the employees payslip.
However, it is this very opacity that means it will not be removed by any government that I can see anywhere on the horizon even though it is very clearly ‘a tax on jobs’.
Politicians will eternally trot out the line that ‘Employers must make a contribution’ to preserve this opaque tax. Equally, they can usually (but not always) kick it up a few notches in the good times without too much shouting and screaming.
Hang the lot of them I say…
Jerry
because of course there is a law that says you must have a big switch and that this big switch must not be reachable when you are standing in the shower etc etc etc
precautions regarding electricity and water