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But? The headline above Allister Heath’s latest over at City A.M. reads as follows:
America is slashing spending – but its economy is still growing
By “spending” Heath, or Heath’s headline writer in the event that it’s not Heath, means government spending.
We’ll know we’re really winning when headlines like that one replace the “but” with an “and”.
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“America is slashing spending” LOL! Yeah, right. The truth is that spending is not INCREASING as much as the left wants. This is known as “slashing” and “cutting to the bone” and “throwing old people and the poor into the streets” in their world.
I wasn’t aware America was slashing spending. Is that true? What does he really mean when he says “Real federal spending is set to slump by six per cent in the fourth quarter, compared with the same period a year ago”?
To journalists and politicians, a decrease in the increase is a cut. The gods of the copybook headings, however, disagree.
I think an even better change than “and” would be “so.”
Robert is correct – government spending is not (overall) being cut.
Nor is the restraint in some department budgets (and there is some) the ones that Paul Darth Vader Marks would pick – the Defence Department has been very badly hit.
But………………….
Some government spending restraint is better than no government spending restraint.
Some years ago a deal was done between Congressional Democrats and Congressional Republicans.
“Unless there is a budget deal by X date – then some departments will get their budgets hit”.
“Some departments” turned out to mean (when one read the small print) the Defence departments – about half the entire hit will be on this one department.
The Democrats laughed behind their hands – the Republicans would never really let the Defence department be hit, when the time came they (the Republicans) would agree to yet more tax increases.
Well the date came – and the “Warfare State” (according to the “libertarian” left) Republicans swallowed hard and ACCEPTED the hit on the Defence department.
“Libertarian” left please note – YES the Republicans are the party of the “evil capitalists”, but only a small minority of “evil capitalists” depend on business with the Defence Department.
This (the spending hot on certain departments) is one of the two bright sparks in the economy.
The other bright spark is the boom in hydrocarbons – “fracking” and so on.
Oh Jay D…….
They are not counting “entitlement” spending.
But you guessed that did you not?
Oh something I forgot……
Some government spending that my dear friends the Economist magazine people are very keen on is also being hit.
Federal “infrastructure” spending and “research and development” spending (read “corporate welfare” for both) is being hit.
And Paul Darth Vader Marks is very pleased about this.
Very pleased indeed.
Of course, the “Entitlement” spending (in the United States and other countries) will still destroy the world.
But let us have a bit of fun before then.
By the way, there may be a reason why Comrade Barack’s cunning plan to destroy to the hydrocarbon industry and send Charles and David Koch to Gitmo (or wherever) has not (YET) worked out as well as he hoped.
Perhaps a lot of “Environment Protection Agency” employees are like the glorious Mr Beale.
Mr Beale is the gentlemen who, instead of using taxpayer money for the Revolution, put a million Dollars of it in his personal account – and then did not turn up for work for six months (giving the false excuse that he was a CIA agent – off on a mission, and leaving the office in a bigger mess than usual).
Mr Beale is my new hero – I hope all EPA employees are just like him.
Perhaps he had a friend in charge of the Obamacare website budget?
My word, “P. D. V. Marks” looks posh!
Paul,
No more free lunches from me for your endless plugs for the mazagine with almost no readers that I shall not name. One might conceive a conspiracy theory whereby you mention it in an effort to drive its web traffic up and boost otherwise flagging stats, if one were paranoid.
As for Mr Beale, there is a witness statement, this quote sprung out as diagnostic of government.
From where I sit, here i the US, there is no reduction of spending or improvement in the economy.
Mr Ed I humbly apologise.
Modernist semi-Keynsians, who only talk about the spending to increase demand theory but never about the saving and cutting expenses part, cannot envision an economy which is not dependent upon a gushing federal spending hydrant for its well-being.
There’s a thread over at Chicagoboyz right now about the depression of the 30’s, with a full-fledged new dealer there throwing stats around to prove that FDR saved the economy, without any recognition whatever about the major statist causations that started and prolonged the collapse.
Political types and their supporters always love to hail the glorious white knight riding to the rescue of the suffering citizenry, but never seem to get around to discussing the true causes of the problems except to condemn the usual scapegoats.
In fact, history is replete with very clear instances of stupid, counter-productive politics undermining normal, economic functioning, but the conventional wisdom, written by whoever gets to construct the narrative for that period, usually someone in with the power group, always passes off the blame to some other cause(s).
We are watching that scenario right now with the absurdly incompetent debut of the state medical takeover in the US, and it was very successful after the 2008 financial bubble in blaming all those evil bankers and such instead of any of the pols whose policies actually led to the collapse.
So, it is not at all surprising to see these kinds of completely clueless statements, based on the relentless indoctrination by the schools and media, which hold the state as the fountain of all good things, and the evil scapegoats du jour as the villainous “kulaks”, who are the cause of all our problems.
In one of the greatest intellectual/moral frauds of all time, the sophists of the collective have managed to make the private actions of economic actors an evil threat, while the political actions of the corrupt and incompetent ruling elite are the salvation of the nation.
This can only happen in a society reduced to the mentality of the young metallurgist, and endlessly distracted by a continuous stream of trivial and salacious gossip disguised as news.
This grotesque tragi-comedy will not be undone until those who reject the collectivist mentality complete their own march through the institutions, and the sooner we get started, the better.
By the way, this form of media has become a very powerful force already, so don’t be surprised when the collective strikes back, as it has tried to do several times in the past under this guise or that.
At this juncture, we must rely on the “power of the powerless”, not an insubstantial instrument, while we gather our strength.
Fortunately, the arrogant incompetence and corruption of our adversaries undermines everything they do, and enables those who yearn to live with freedom and dignity.
As one of my historical heroes always said, “Carthago delenda est”, so I have become a broken record when I repeat that each free person must be ready to defend that freedom at all times, verbally and physically, in every possible context.
We may never be able to destroy collectivism, and salt it’s breeding ground, as the Romans did, for it springs from the lowest and most primitive aspects of the human mind and emotions, but each battle in the endless war is critical, whether large or small.
Stand ready.
I had to check the date on the article, to be sure that it wasn’t written during the 90s or something.
sometimes it’s worth giving the MSM the benefit of the doubt. this was not one of those times.
Frankly, I doubt that they are “slashing spending” and I doubt that the economy is “growing” (though I suppose there is a first time for everything!)
We are talking about Government Statistics after all – and their interpretation, re-interpretation and simplification at the stages of gathering, analysis and every step in between. Think of the British analogy: who here believes what our enlightened and self-less elders and betters say about crime?, employment/unemployment? education, (“British children have never been better educated”)?, immigration?, anything at all, really? As we crumble into the CCCP but with less cabbage soup we find that we have adopted with some enthusiasm their “bikini” model of statistical compilation – less interesting for what they show than for what they cover.
First I repeat what I said about government spending.
Turning to other matters….
veryretired – as you know there have been many credit-bubble busts in American (and British) history. See (for example) Rothbard’s “The Crash of 1819”.
So what was special about the crash of 1929? Why was it different from say the crash of 1921?
veryretired knows – but other people may not.
In every previous crash within a year or so the United States economy was recovering.
Not so with 1929 – Herbert “The Forgotten Progressive” Hoover and Franklin Roosevelt refused to allow prices and wages to adjust to the credit-money bust.
Not till World War did wages really adjust – and even then it was done in sly, dishonest way.
The people were told their wages were not being cut and that prices were not rising – after all “official” prices were not.
Real prices (so called “Black Market” prices) were rising (as the government well knew – indeed their war time monetary expansion made that inevitable, see Robert Higgs on this and other such) hence REAL wages were being cut – and the mass unemployment could fall (the adjustment could be made).
So it was REAL wage cutting that ended the mass unemployment of the 1930s (and enabled economic growth, and real wages, to grow AFTER the war – during the period of the “Do Nothing Congress” of the late 1940s).
Exactly what Keynesians say does not work.
Although real wage cutting worked in 1921 and in every other crash since that of 1819. Sure real wages can go up over time – but only with rising productivity NOT in an bust (in a bust they have to FALL – the “Demand” theory is wrong, flat wrong).
So the ten years (plus) of mass unemployment in the 1930s was totally unnecessary – it could have been dealt with in a year.
But that would mean that “empirical” NOT meaning “totally ignore historical evidence” – which is what “empirical economists” act as if it means.
6% is not a slash.
I do hope everyone understands that, as I just read on the Internet, our inflation rate for the last I-forget-how-many months is only 1.5%.
Although that’s not the impression I’ve gotten from my forays in the grocery-store aisles.
yes search that at history hanover edu. the book is very good too. would do links but smiting is a concern
well the book is good because it was originally samizdat
Paul:
When I read Keynes’s General Theory, I was quite surprised to see him saying explicitly in the first chapter that the way to end unemployment was to lower real wages to where it was profitable for employers to hire again. The joker was that he thought workers would not agree to a pay cut and could not be made to do so. I’m not sure what conditions were like in the UK in the 1930s—perhaps this reflected excessively powerful labor unions, or generous enough income maintenance so that the worst pressure to find a job was off, or simply stubborn pride making men unwilling to take a pay cut or a different job—so I don’t know if Keynes was right about that. But in any case, his remedy was to inflate the currency enough so that real wages were significantly lower, while money wages were no lower, thus tricking working men into taking the lower paid jobs they despised.
Seemingly it didn’t occur to Keynes that labor unions would follow the cost of living statistics, or hire their own economists or statisticians, and demand pay raises to keep ahead of cost of living. Or that in the long run, workers would adopt new mental baselines, and expect pay to rise steadily. He had at least the clever man’s vice of thinking that other people were less clever than he. One might also think that the ethics of tricking laborers into worse pay, instead of telling them straight out that times were hard and they couldn’t go on as they were, was questionable. In any case, since I read that I’ve been rather baffled as to why Keynes was so well loved by the left, with their claim to care about the working class.
These are the same people who fight for relaxation of criminal sentencing laws with the headline “crime is falling, but prisons are overflowing!”
So, I wouldn’t bet the farm on seeing an “and” replace that “but” any time soon.
William unions (not “workers”) would be in no position to “refuse to accept” real wage reductions in a crash if it had not been for the artificial powers given to the unions by, in Britain, by such Acts as that of 1875 and 1906. In the United States even before the Act of 1931 the Hoover Administration (contrary to its reputation) had put the power of the government firmly on the side of maintaining real wages – as part of the “demand” fallacy that Herbert The Forgotten Progressive Hoover was in the grip of.
As for Keynes and the “money illusion” (create lots of price increases – so that real wages are cut even whilst nominal wages are not).
Did he really believe that union activists were that dumb?
I doubt it – and the introduction to the German edition of the “General Theory…..” casts doubt.
In this introduction Keynes supports the German government (the Hitler government) policy of direct government control of wages (and so on).
Of course if the government is actually deciding what wages (and dividends and so on) are – then no “money illusion” is needed.
Just the prison guard and the hangman.
That is the wonderful “humane alternative to lasses faire” that Keynes offers.
Totalitarianism – oh yes, the word is there (in the introduction to the German edition of the “General Theory”).
If this man Keynes and his Cambridge and Bloomsbury friends were “liberals” then I am six feet tall and have a full head of hair.
Hunter Lewis (in “Where Keynes Went Wrong”) is accurate in describing what these Progressive immoralists were really like.
For the effects of government interventions in giving unions absurd powers (which even more government interventions are presented as the only cure for) see W.H. Hutt work on “collective bargaining” really “the strike threat system”.
When Paul meets Google.
I think that Alisa has convinced me that this “internet” thing is useful.
My work here is done:-)))
On “inflation”.
Firstly – historically this meant an increase in the money supply (not in some “price index”), that would lead us to a discussion of different forms of money supply (the world of the “Ms” – and I would bore everyone to death, so I will just make the point that the various Central Banks have been desperately increasing “narrow money” for fear of a “broad money” credit-bubble collapse – the sort of that an unfeeling swine, such as myself, would just allow to happen).
As to indexes and Julie’s experiences in the shops……
Irving Fisher (who popularised the use of price indexes back in the 1920s) may well have been an honest man – although radically misguided (as Frank Fetter pointed out at the time). However, the people presently in charge of such price indexes are not honest people.
Government “inflation” figures (indeed all government statistics) are best treated with deep caution.