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POPSIs the Economy Recovering? The Curious Case of 1920 vs. 1929
The basic questions we need to ask here are: 1. Why do economies recover? 2. Are we recovering? Q. Why do economies recover? A. They recover because bad investments made during the bubble are liquidated, valuable capital is no longer being wasted on them, new capital is formed from savings, and profitable enterprises attract new capital to expand. Low real interest rates caused by increased savings encourage borrowing, manufacturers use the capital to make new machines, producers of consumer goods buy them, cash goes through the system, consumers see things are getting better, more consumer goods are produced, and consumers buy them. It has to happen this way or the recovery will fail. The difficult part of a recovery is ugly. Bankrupt firms need to fail so that valuable capital resources are not wasted on their continuing activities. This means that unemployment rises (10.2% now) and business bankruptcies are high. Trillions of dollars of asset values are wiped out.
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POPSBarbara Ehrenreich: The Swine Flu Vaccine Screw-up More: According to Health and Human Services Secretary Kathleen Sebelius, the government was misled by these companies, which failed to report manufacturing delays as they arose. Her department, she says, was "relying on the manufacturers to give us their numbers, and as soon as we got numbers we put them out to the public. It does appear now that those numbers were overly rosy." If, in fact, there's a political parable here, it's about Big Government's sweetly trusting reliance on Big Business to safeguard the public health: Let the private insurance companies manage health financing; let profit-making hospital chains deliver health care; let Big Pharma provide safe and affordable medications. As it happens, though, all these entities have a priority that regularly overrides the public's health, and that is, of course, profit…
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POPSJobless Rate Jumps to 10.2% How much of that Stimulus money has gone overseas to *create* US jobs over there? I guess Ms. Pelosi will say we need to extend the unemployment benefits even more and her health care bill will be needed now more than ever. The American people can not win with this crowd. This Administration is Carter on steroids.
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POPS Economic Stimulation I’m a little late to today’s economic-stimulus exasperation party. Sorry. I was busy working at my unstimulated private-sector job, which uses pulp, ink, trucks, pens, notebooks and a lot of eletronics plus electricity and employs hundreds of taxpayers directly and indirectly to tell people how the hacks are trying to shaft them in Boston. It was great. I enjoyed it. Even though, far from looking for or getting any support, we’ve had to fight the government over simple things like the freedom to enter business relationships with other news organizations that might have made us more financially viable. Thank you, Ted Kennedy, liberal lion.
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