Well, Duh! - Government Regulations are Hurting the Economy

My Econ 101 professor told a joke at the beginning of the semester: If you were to lay all the world's economists end-to-end, they wouldn't reach a conclusion.

*Rimshot!*

If he were alive today, I'm pretty sure he'd be amazed at just how much IQ's have dropped in the ensuing years, particularly in the area of economics. What was understood as plain fact not long ago isn't so plain any more.

Part of this is the urge by many economists to transmogrify themselves into modern-day oracles. It is in their interest that economics be viewed as some sort of mysterious art practiced by an elite few, who demand of the masses large quantities of money for advice they should already know.

Like, "Buy low, sell high."

I could go off on another tangent about how the basics of economics (along with quite a few other basics) are no longer taught in schools, but you knew that already.

Here's the simple truth: if you have a household budget, you already know everything you need to know about economics. Balancing a checkbook, managing expenses, and justifying purchases gives you all the economic principles you'll ever need. Government adds just a few zeros to their figures.

It's not rocket surgery.

Granted, there are many subsets of economics and different ways of looking at data, but it still has at its foundation some very basic principles.

In your household budget, you have overhead: rent or a house payment, utility bills, groceries, and other bills that must be paid first. Anything left over is called "disposable income." Now, let's say gasoline prices start to rise, but your wages or salary doesn't. That reduces your disposable income. How about if grocery prices begin to rise? Same thing happens: you have less money.

Now let's say that the reason for rising gasoline prices is something like, say, a government regulation that prevents domestic oil producers from drilling in the Gulf of Mexico. Or maybe it's not a new regulation, just a dramatic slowdown in the number of drilling permits issued. Either way, government is causing you to have less money to spend. The principle, and the result, is the same.

Let's also say that we had an entire administration that sees the whole of American enterprise (our formerly-free market) as one large area that needs to be regulated, because, well, because that's what governments are supposed to do, right?

Those inside the government think that it's their job to regulate. Witness former Speaker Nancy Pelosi's brag that the 111th Congress was the "most productive in years." As I pointed out in that post, that's nothing to brag about, not in America.

Now, let's take another look at someone who just loves regulations: Barack Obama.

...the Obama administration enacted 32 new “major” regulations – rules that carry an estimated price tag of $100 million or more. These measures stand to cost the U.S. economy $10 billion a year, along with an additional $6.6 billion in first-time implementation costs.

And that's in just one year. The principle here is that regulations cost jobs. More regulations equals more money added to the cost of doing business.

At some point, you've regulated enough. We have reached that point. Actually, we reached it a long time ago. Even some of the Economic Oracles have noticed: California governor Jerry Brown wants to cut through the environmental red tape to waste taxpayer dollars on the high-speed rail boondoggle.

And Citigroup chimes in as well: Don't Blame Wall Street for the financial crisis, blame the Community Reinvestment Act.  Yeah, when you have the government forcing you to lend to people who clearly can't afford a home loan, what could go wrong? Even Barack Obama thought it was such a good idea, he sued banks to enforce the CRA.

Wonderful.

Government regulation = lost jobs. Got it? Good. Now, go out and find a few candidates to vote for who will begin to dismantle this dangerous Leviathan of government and regulations before it's too late.

OK, class. That's it for Economics Monday. Try to have a good day.

US Drowning in a Sea of Debt by Design

As the budget battle in Washington takes shape, one thing is becoming painfully clear. It’s a question that has been lurking in the corners of everyone’s mind. And now, faced with the simple, stark choice of increasing or decreasing the size of the federal government, it can no longer be avoided.

This binary argument seems to be too simple for many career politicians to comprehend. The answer is either a “yes” or a “no.” One answer will lead to our destruction; the other will start to turn us toward prosperity once again.

After two years of Obama and his hard-left enablers in the Congress, our economy is in shambles. More money has been spent by them than by any Congress or president in our nations’ history, using the excuse that massive amounts of tax money was needed to pull us out of the most severe recession any of us have ever seen. TARP, the Stimulus, Cash for Clunkers and the takeovers of the healthcare, student loan and banking industries have resulted in a sea of red ink.

The world’s financial sharks are circling, smelling our nations’ life-blood in the water, waiting for our ship of state to sink so they can feast upon our remains.

Oh, and a happy Monday to you all.

This is a problem of our own making. Can there be any doubt that we’ve chosen people to represent our interests in Washington with all the thought that goes into the purchase of a pack of chewing gum? Big Spending Progressives with no real understanding of free market economics have ruled the waves. They have repeatedly violated all the know laws of economics and have brought us to this sad point in our history. One expensive and intrusive government program after another has effectively done what no foreign fighting force could ever hope to accomplish.

They have brought us to our knees.

At the risk of sounding like a broken record, I’ll repeat a few of the numbers. Regular readers will already know these things, as I try to keep you all informed of the things you won’t hear on the evening news reports. You need to tell your friends and keep reminding them that things don’t have to be this way. We could have pulled out of this recession long ago: it’s the lack of leadership we have in Washington that is directly to blame for our continuing troubles.

We could have low gasoline prices, but President Obama is actively preventing us from exploring our rich natural resources. He would rather help Brazil drill for oil with $2B of our tax dollars.

We could have lower prices at the grocery store, but the Fed is pumping dollars into the economy recklessly in an attempt to inflate our way out of  debt.

Food prices are rising in part because of the misguided emphasis on unproven energy ideas that are subsidizing corn for use in our gas tanks instead of oil, resulting in higher feed grain prices for meat along with every other food that uses corn in any form.

Jobs are being displaced as the costs of doing business rise because of increasing rules and regulations imposed upon small companies. Add to this the overt hostility to “big business” and “the rich” that is contained in every speech that Obama gives. His demagoguery of the Ryan budget plan was full of it.

Class warfare is being used against us to divide and conquer. Those of us who are old enough to remember when we all wanted to be rich, because we could be, now stare in disbelief at a president who openly criticizes the creation of wealth and the demonizes wealth-creators as an enemy, while Al Qaeda and muslim extremism is not. I cannot fathom the enthusiasm of anyone who has been without work for years cheering his of speech.

High unemployment, the reporting of which is skewed by the numbers of unemployed who have dropped off the state’s rolls, record numbers of Americans in poverty and on food stamps, an anemic GDP projection of 1.5% all spell economic doom for which there are solutions, but this administration will not embrace.

What this administration does embrace is immature blaming and finger pointing. While actively preventing a recovery, they seek to lay blame on the dread George Bush for getting us into the mess that they cannot seem to get out of. Sorry Barry, after two years, you own this economy, and somebody needs to tell you, You’re Doing It Wrong.

So, we’re back to The Question. Since Americans are a forgiving nation, we have waited patiently to see whether Washington and this administration would do all the things it promised when it was elected in 2008. As things deteriorated, we waited some more, thinking that eventually Democrats would wake up to the facts that the rest of us know and start turning the economy around by opening up our domestic oil fields for production and loosening the reins on the business community to release the flow of private sector activity that will lift us out of this Obama Depression.

We wondered whether it was incompetence on their part, or naivety. They’ve had two years to accomplish their goals, and it seems as if they are doing what they planned.

We wondered if the continued harm they are inflicting upon our economy was deliberate. After Obama’s speech last week blasting Ryan’s budget plan, there can be no further doubt.

This is being done to us on purpose.

Crazy Uncle Barry Maxes out the Family Credit Cards

“Um, Uncle Barry, can we talk?”

“Yes, Nathan.”

“We just got the credit card bill in the mail today.” Nathan sat dejectedly on the footstool next to his uncle.

“Yeah, uh, what, uh, about it?”

“It seems as though we owe them a great deal of money.”

“I don’t understand your concern.”

“Well, we simply can’t afford to keep making these payments.”

“Why is that a problem? You know that making that payment is good for you, don’t you? It teaches you discipline.”

“I’m not so sure anymore, Uncle Barry. When we took you in, you said you’d help us around the house. We trusted you when you said you’d help us, but letting you handle the family’s budget isn’t working out the way we had hoped.”

“Nate, you know I love you and your family very much. I’d never do anything to harm you. I always have your best interests in mind.”

“We know, you’ve told us many times.” Nathan waved the bill in the air. “But this is getting out of hand. We just can’t keep spending money like this. We can’t even pay down the principle, this next payment is four times higher than our last one, and that’s just the interest.”

Uncle Barry turned down the TV volume and sat up in his recliner, finally looking away from the golf game. “I knew you might have some reservations about taking me in when your Aunt Zettie passed away two years ago. I was grateful for the opportunity and vowed that I’d make my time here as comfortable for you all as possible. Why, just look at your daughter’s face, how she smiles when she turns on her new phone.”

“Yeah, about that, Uncle Barry. She already had a phone that worked just fine.”

“And look at your son, Will. Don’t you think he thinks of me when he starts up his new Cadillac every morning to go to school?”

“His old car ran just fine. It got good mileage and we almost had it paid off. We were going to use that spare money to add to his college fund.” Nate responded.

“But now he’s the envy of all his little friends. It’s important that he be accepted by them.”

“But, Uncle Barry, Will has good friends who value him for himself, not what he has, or which car he drives.”

“Just think of the new friends he’ll have when they see him now.” Uncle Barry leaned forward in his recliner, “And what about how your wife looks at you when she puts on her new mink coat?” Uncle Barry gave Nathan a sly wink.

“Well, she likes it, but she hasn’t seen this bill yet. Thanks to you, I might be sleeping on the couch soon.”

”Don’t worry yourself, Nate. You can always come down here to the basement and sleep on my couch. That’s what family is for.” Barry said.

“But we’ve got a big problem, Uncle Barry. We simply can’t afford all this, this, stuff you bought.”

“Oh, don’t worry yourself, Nate. I have a plan that will take care of all this. You won’t have to worry any more about anything.”

“Um, what plan is that, Uncle Barry?” Nate said cautiously.

“I’m getting us another credit card!”