Quote of the moment: Herbert Hoover, on credit, in Des Moines, Iowa, 1932

February 4, 2013

Herbert Hoover and crowd in West Branch, Iowa, 1932 - dedication of Hoover Library

Herbert Hoover, 88, attended the opening of the Hoover Library in West Branch, Iowa, on August 10, 1962, 30 years after his speech in Des Moines defending actions to shore up the credit of the U.S.  At this 1962 event, former President Harry Truman came to pay respects, mensch that he was; Truman is walking ahead of Hoover here.  Photo from Travel Iowa blog, and probably from the Hoover Library and Museum

Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs.

  • Herbert Hoover, address at Des Moines, Iowa, October 4, 1932. — The Public Papers of the Presidents of the United States: Herbert Hoover, 1932–1933, p. 467.  (courtesy of Wikiquote)

_____________

Just a month before he would be crushed at the polls by Franklin Roosevelt, President Herbert Hoover returned to Iowa, his proud home state, to deliver this speech in Des Moines, detailing actions his administration had taken over the previous 18 months to save the U.S. and world economies.  Much of this action had been out of the glare of popular press.  Hoover hoped that by explaining the difficult battles his administration fought behind the huge oak doors of boardrooms and international diplomacy, Americans might appreciate more what he had accomplished, and not focus so much on the fact that the Great Depression still ravaged millions of Americans.

In today’s anti-credit political environment, it is interesting to see one of our most ardent businessman presidents defend credit. In an irony unappreciated in today’s political discussions, much of the discussion in 1932 between Hoover and Roosevelt was over which one could better manage to get to and keep a balanced budget.

The full speech is available at The American Presidency Project housed at the University of California – Santa Barbara. Politics wonks, history fans, and economists will want to look at the full speech this line is ripped from, contextually bereft. Context, in this case, does not change the meaning, but deepens the complexity of the issues and time.  Hoover bragged about keeping the U.S. on the gold standard, because so many contracts and mortgages were written to be payable in gold, and not currency.  So leaving the gold standard could have enormous disrupting influence on credit.

The first of these perils was the steady strangulation of credit through the removal of $3 billions of gold and currency by foreign drains and by the hoarding of our own citizens from the channels of our commerce and business. And let me remind you that credit is the lifeblood of business, the lifeblood of prices and of jobs.

Much of the rest of the speech defended Hoover’s use of government in ways that would cause apoplexy among Tea Partiers and a blizzard of critical press releases from Republicans, today:

Hoover addresses a large crowd in his 1932 cam...

Hoover addresses a large crowd in his 1932 campaign. (Photo credit: Wikipedia)

Now, we have fought an unending war against the effect of these calamities upon our people in America. This is no time to recount the battles on a thousand fronts. We have fought the fight to protect our people in a thousand cities from hunger and cold.

We have carried on an unceasing campaign to protect the Nation from those unhealing class bitternesses which arise from strikes and lockouts and industrial conflict. We have accomplished this through the willing agreement of employer and labor which placed humanity before money through the sacrifice of profits and dividends before wages.

We have defended millions from the tragic result of droughts. We have mobilized a vast expansion of public construction to make work for the unemployed. We fought the battle to balance the budget. We have defended the country from being forced off the gold standard, with its crushing effect upon all who might be in debt. We have battled to provide a supply of credits to merchants and farmers and industries. We have fought to retard falling prices. We have struggled to save homes and farms from foreclosure of mortgages, battled to save millions of depositors and borrowers from the ruin caused by the failure of banks, fought to assure the safety of millions of policyholders from failure of their insurance companies, and fought to save commerce and employment from the failure of railways.

We have fought to secure the disarmament and to maintain the peace of the world. We have fought for stability in other countries whose failure would inevitably injure us. And, above all, we have fought to preserve the safety, the principles, and the ideals of American life. We have builded the foundations of recovery.

Now, all these battles, related and unrelated, have had a single strategy and a single purpose. That was to protect your living, your comfort, and the safety of your fireside. They have been waged and have succeeded in protecting you from infinitely greater harm that might have come to you.

Thousands of our people in their bitter distress and losses today are saying that “things could not be worse.” No person who has any remote understanding of the forces which confronted this country during these last 18 months ever utters that remark. Had it not been for the immediate and unprecedented actions of our Government things would be infinitely worse today.

Instead of moving forward we would be degenerating for years to come, even if we had not gone clear over the precipice, with the total destruction of every ideal we hold dear.

Let no man tell you that it could not be worse. It could be so much worse that these days now, distressing as they are, would look like veritable prosperity.

In all these great efforts there has been a constant difficulty of translating the daily action into terms of public understanding. The forces in motion have been so gigantic, so complex in character, the instrumentalities and actions that we must undertake to deal with them have been so involved, the figures we must use are so astronomical as to seem to have but little relation to the family in the apartment or the cottage or on the farm.

English: Franklin Delano Roosevelt and Herbert...

Five months after Hoover’s Des Moines speech, Franklin Delano Roosevelt and Herbert Hoover in convertible automobile on way to U.S. Capitol for Roosevelt’s inauguration, March 4, 1933 (Photo credit: Wikipedia)

If Hoover made that speech today, every fellow at the Hoover Institution would sign a petition demanding his impeachment, never mind that he’s not president any more.

____________

A few notes about the photograph at the top:  This photo shows two former presidents, Herbert Hoover and Harry S Truman, walking through a crowd at the dedication of the Hoover Presidential Library and Museum, in West Branch, Iowa, in 1962.  One might pay careful attention to how lax security was, generally — the crowd is allowed within an arm’s length of the two former presidents — and this was after an assassination attempt had been made on Truman, in Washington, years before.  Insignia on the uniforms of the police are difficult to discern, but from the uniforms it looks as if there was a combination of local police, possibly a county sheriff’s staff, and Iowa state highway patrol troopers.  I found it interesting to note that several of the younger men appear to be Explorer Scouts, BSA — one wearing what appears to be an Eagle Scout neckerchief. Cameras were special event tools, but generally not of the quality that could get a decent photograph at an event like this, except for professionals with professional cameras.  Still, visible are double-lens reflex cameras held up in hope of a proper aim, small Kodaks, one man winding film in a 35-mm single-lens reflex, and a tiny handful of home movie cameras (with three lenses on the front — wide angle, normal and modest telephoto).  Click on the photo for an expanded view, and see what else you may.  If by chance you know anything about this photo, Dear Reader, please tell, in comments.

Tip of the old scrub brush to Henry Mowry at Mowryblog.

More, and resources:

Presidents Harry Truman and Herbert Hoover at the dedication of the Herbert Hoover Presidential Library and Museum on August 10, 1962 (Photo credit: Wikipedia)

Presidents Harry Truman and Herbert Hoover at the dedication of the Herbert Hoover Presidential Library and Museum on August 10, 1962 (Photo credit: Wikipedia)

2 Comments | Boy Scouts of America, Campaigns, Economics, Famous quotes, Great Depression, Harry Truman, Herbert Hoover, History, Quotes | Tagged: , , , , , , , , , | Permalink
Posted by Ed Darrell

GOP “no-budget” hoax

January 28, 2013

If you repeat some hoary old falsehood often enough, people will begin to assume it’s got some accuracy to it, right?

Paul Ryan and Eric Cantor are at it again, complaining that the Senate hasn’t passed a budget.

But that’s false.  In fact, no only did the Senate pass a budget, but so did the House — and then (perhaps stupidly), they made it a law instead of the budget resolution the Congressional Budgeting process calls for.

Then-Senate Budget Committee Chairman Kent Conrad, D-North Dakota, explained last April how this worked:

We’ve got a budget, by law — and it’s a disaster.

We don’t need a budget resolution nearly so badly as we need some Congressional leadership who understand supply and demand, and who are committed to good government and not the destruction of America (even if unintentional).

Oliphant cartoon on GOP leading nation over fiscal cliff

Cartoon by Pulitzer Prize winner Pat Oliphant, syndicated by Go Comics

More:

Text of Sen. Conrad’s remarks, below the fold.

Read the rest of this entry »

Leave a Comment » | Economics, Financial literacy, History, Hoaxes, Political cartoons, U.S. Senate | Tagged: , , , , , , , , , | Permalink
Posted by Ed Darrell

Obamacare: Still the better way, still saving money, still a good deal

January 20, 2013

A guy named William Duncan at a blog called Sensible Thoughts posted something I found inherently unsensible a while back.  He listed six reasons why he thought the Affordable Care Act should be repealed. (“A while?” “Yeah, July 2012 is ‘a while.'”)

His sixth point was the old canard about Congress and the President being exempt.  Of course they are not exempt, and so I told him.

Your sixth reason is in error. There is no provision to exempt either the president or Congress from the act. There is no language in the bill such as you describe. Language from page 114 can be found here:

https://timpanogos.wordpress.com/2012/04/17/obamacare-making-stuff-up-to-complain-about/

At some length, Mr. Duncan removed that point, but said he still thinks the law should be repealed on the other five points I hadn’t dealt with.

Ed:
Thank you for the correction on point #6. I have gone back and looked at this, and you are absolutely right. Although the Wall Street Journal and folks like Sean Hannity reported that the President and members of Congress are exempt from participation in the Affordable Care Act, in the end that did NOT make it into the language of the legislation. I have deleted point #6 from the post as a result. Thank you for the correction. Now, if you copuld only prove me wrong on the rest of the points listed…. Unfortunately, this remains a bill the the American public did not want, and was purchased by shenanigans that the Administration should be ashamed of.

A quick and dirty response; we may need to put more meat on these response bones in the next couple of months, because the opposition to ObamaCare relies on severely distorted claims about the law and what it actually does.  Much if not most of the good stuff in the law is completely ignored by these critics, and we should point that out, too.

I responded (images added here):

Disproof?

What makes you think Americans didn’t want it? There was a whale of an anti-health care campaign after the act passed, but when it passed, it enjoyed a majority of support. And, when we take each provision of the bill and ask people about that provision, they approve overwhelmingly.

English: Depiction of the House vote on H.R. 3...

Depiction of the House vote on H.R. 3590 (the Patient Protection and Affordable Care Act) on March 21, 2010, by congressional district. Democratic yea, dark blue; Democratic nay, light blue; Republican nay, red; No representative seated, white. Image from Wikipedia

For example, not even you are opposed to continuing the Reagan-era program that encourages medical schools to train more general practitioners. No one seriously objects to the provisions that pay physicians to practice in under-served areas, like West Texas, Iowa, and West Virginia. No one objects to the provisions that train more nurses. Only the most rabid racists complain about continuing and expanding the health care clinics on Indian reservations.

The law has dozens of provisions like those, and no one in their right mind objects to them.

Your other five points?

  1. The Supreme Court killed that one for you. They said that, even if you call it a fine, it’s a tax. And at that, it’s a helluva bargain. For those who do not purchase health insurance because they can’t afford to, they must pay $695 additional tax, per year. That’s about what I’d pay monthly on the open market.In any case, there are no fines, according to the Supreme Court.
    English: Depiction of the Senate vote on H.R. ...

    Depiction of the Senate vote on H.R. 3590 (the Patient Protection and Affordable Care Act) on December 24, 2009, by state. Color code is difficult to decipher; let it suffice that if there are two Democratic yea votes, the state is colored deep blue; if two Republican nay votes, very red. Image from Wikipedia

    But I can’t imagine why you oppose bargains in health care, especially when they lower the costs of health care to the insured, who will no longer pay the 15% to 25% premium to cover indigent care.

  2. With all the “new taxes,” CBO, the non-partisan group that scores these issues for Congress, projects the bill will decrease federal spending and cut the deficits annually, when fully enacted in 2014 and all out years.Do you oppose deficits or not?All the other taxes are fair, strike only the tippy-top income tiers, and are cheap at that.These taxes make the system more fair. It’s stacked against anyone making less than $150,000 a year, now. That’s most of us. I don’t like it when government helps the rich, at the expense of the poor — that’s contrary to moral standards my church holds, for example, and it tends to damage the economy.So I think more fair taxes, and lower costs, will be quite popular, once we see them.So, new taxes aren’t a good justification to oppose the law.
  3. Speaking of fallacious accounting — CBO, the group you cite, says the bill will reduce the deficits. You assume the Law won’t work, while small portions of it have already slashed inflation in health care costs, from 20% in 2009 to 4% in 2011 and 2012.But, what about repeal? CBO looked at that, too — repeal of the law will increase deficits, not decrease them. It’s only $109 billion increase in deficits, but these number directly refute all claims that repeal would be cheaper. See the analysis gateway here: http://www.cbo.gov/publication/43471
  4. This Medicare issue was hashed out, accurately and well I thought, in the campaign. Medicare costs will be reduced by holding costs down — benefits will not be reduced. Eric Cantor and Paul Ryan ran into some difficulty with this, because their budget plans assumed the savings from the Affordable Care Act, while eliminating the law that produced the savings.I’m sure there will be some adjustments required. Medicare seems a little ham-fisted when it comes to dealing with local and regional cost differences, but nationwide, over the past 40 years, enormous savings have been realized by reducing some reimbursements for procedures that once were uncommon and expensive, to a less expensive rate, now that they are more common. On the whole, over 40 years, over thousands of procedures, physicians have changed their expectations, and things have worked fine. Oh, there have been grumblings, I know. But the cuts in costs, without cuts in benefits, have stuck.Under the Affordable Care Act, we hope a lot more people will move to company plans from Medicare, or at least to the exchange plans offered in each state.One of the changes already introduced is working [link added here]. Rather than pay providers for each procedure, Medicare now reimburses hospitals for effective hospitalization — that is, when a patient is discharged and then re-enters a hospital for the same complaint, the hospital will lose money. Hospitals are keeping patients a few days longer on many procedures, to insure that one hospitalization is all that is required. Savings are already being made in costs, while improvements have resulted in the health care – better health in the patients!In all, CBO says costs will come down with the Affordable Care Act, as advertised, and costs will rise and deficits will rise if the Act is repealed.
  5. Your abortion argument is too metaphysical, and not enough real-world. Do you want to reduce the number of abortions? Then provide health care, make sure contraception is freely available (not for free, but freely), and stand back. Those two things reduce abortions, as they did during the Clinton administration.Restrictions on abortion, on the other hand, make it more likely a woman will choose to terminate a pregnancy under a number of circumstances: She doesn’t have health care coverage, her coverage does not cover pre-natal care, her coverage won’t cover a new infant, the pregnancy is unplanned due to lack of good information on family planning or lack of access to affordable contraception.You can choose: Restrict abortions and increase the number of abortions, or provide health care, and reduce the number of abortions.It may be a bit counter-intuitive, but you’d better study the issue. The Affordable Care Act’s provisions, Obamacare, have over the years reduced abortions where applied; cutting off that care has increased the number of abortions.My advice would be, don’t kill the babies to make a political point.

I am concerned that you don’t appear much familiar with what the bill actually does. Here are a few reasons to keep the law.

  1. We need more physicians, and the bill provides them.
  2. We need more physicians in underserved areas, and the bill provides them.
  3. We need more nurses, and the bill provides them.
  4. We need more community clinics in underserved urban areas [link added here], where illnesses and injuries frequently go untreated until extreme trauma results, and the victim must get extremely expensive care in an emergency room. This will be one of the biggest cost savers — and the law provides those clinics.
  5. The law will cut the private bureaucracy, and completely dismantle the private death panels set up by insurance companies, saving at least 10% of every health care dollar, applying that money to care instead of bureaucracy. This is already occurring.
  6. Preventive care under the Act is greatly encouraged — if we can boost flu vaccines by another 10%, it will save thousands of lives annually, and millions of dollars in hospitalization costs. Flu shots came with no co-pay this year — did you notice? — so that anyone with any insurance at all could drop by any pharmacy offering flu shots and get one with no out-of-pocket expenses.
    This is huge. Everyone agrees the cheapest health care is for healthy people. The Affordable Care Act changes the way health care is delivered, to emphasize prevention of disease and injury, instead of triage. Prevention usually costs about 10% what the triage would cost.
  7. Removing the lifetime cap on insurance payments, per patient, will save a few thousands of lives, annually. It should kill the phenomenon where many families, hit with a costly disease or accident, had to declare bankruptcy as a result. A significant portion of all bankruptcies have been “not adequately-insured” cases. Those should almost disappear.
  8. Allowing children to stay insured, on a parent’s plan, for those critical years after high school and college and into the second job, with benefits has already benefited millions of Americans, saving millions of dollars and probably a few lives.

I cannot imagine why anyone would want to go back to 20% annual health care cost inflation, the highest per capita health care costs in the world by a factor of two, while leaving one out of every seven people uninsured even though we were paying amounts more than the insurance would have cost.

Obamacare reduces the deficits, and puts our health system on the path to catch up to the rest of the industrialized world, with better care for less cost.

I’ll keep it, thank you.

(See this, too: “More good news about Obamacare: CBO says it will save money”

More:

1 Comment | Barack Obama, Economics, Health care, History, Medicare, medicine, Politics, President Obama, Presidents | Tagged: , , , , , , , , | Permalink
Posted by Ed Darrell

You need to watch this: Paul Krugman, ‘Jobs NOW, the key to our recovery’

January 15, 2013

As so often the case, Bill Moyers finds THE expert, who has the real answers.  Hint:  Cutting deficits now could bring economic disaster; Paul Krugman carefully and clearly explains why.

Description at Vimeo:

Krugman's book End This Depression Now!

Cover of Paul Krugman’s book, End This Depression Now!

Nobel Prize-winning economist and New York Times columnist Paul Krugman explains why our top priority should be getting America back to work – if only Congress and the President would stop throwing distractions in the way. He also details the catastrophic impact the economic downturn continues to have on average Americans, as well as avenues of hope and recovery. Krugman’s latest book, End This Depression Now!, is both a warning of the fiscal perils ahead and a prescription to safely avoid them.

Yeah, yeah, I know — this thing is 47 minutes long!  Watch ten minutes now, and come back to it.

It’s only the fate of our nation, and the planet, that rides on this information.

Moyers explained on his blog:

Nobel Prize-winning economist and New York Times columnist Paul Krugman argues that saving money is not the path to economic recovery. Instead, he tells Bill, we should put aside our excessive focus on the deficit, try to overcome political recalcitrance, and spend money to put America back to work. Krugman offers specific solutions to not only end what he calls a “vast, unnecessary catastrophe,” but to do it more quickly than some imagine possible. His latest book, End This Depression Now!, is both a warning of the fiscal perils ahead and a prescription to safely avoid them.

Some moments from the conversation:

ON JACK LEW, NOT KRUGMAN HIMSELF, AS POSSIBLY THE NEXT TREASURY SECRETARY
“I probably have more influence doing what I do now than I would if I were inside trying to do the court power games that come with any White House, which I don’t think I’d be any good at… What the president needs right now is he needs a hard-nosed negotiator. And rumor has it that’s what he’s got.” Watch this clip.

ON SAVING VERSUS SPENDING
“We’re awash in excess savings. And if you decide to save more, it’s not actually going to help society… If there’s one crucial thing to understand about all this it is that the global economy, money moves around in a circle. And my spending is your income, and your spending is my income. And if all of us try to spend less because we want to save more, we don’t succeed. All we end up doing is creating a global depression… the thing that all the evidence of history says works in a situation like this is the private sector won’t spend, government can step in and provide the spending that we need in order to keep this economy afloat.”

ON THE POWER OF JOB CREATION
“The only obstacles to putting people to work, to having those lives restored, to producing hundreds of billions, probably $900 billion a year or so of extra valuable stuff in our economy, is in our minds. If I could somehow convince the members of Congress and the usual suspects that deficit spending, for the time being, is okay, and that what we really need is a big job creation program, and let’s worry about the deficit after we’ve had a solid recovery, it would all be over. It would be no problem at all… All the productive capacity is there. All that’s lacking is the intellectual clarity and the political will.”

ON WHAT SHOULD BE OBAMA’S ECONOMIC PRIORITY
“[Obama’s] policy priority right now should be doing whatever he can to at least move in the direction of the kinds of policies that we want for full employment, that we need for full employment. And that the obsessions of Washington about a grand bargain on the deficit are really pretty much beside the point right now. That, if given a choice between doing something that will help the economy in the next two years, and something that will allegedly settle our budget problems for all, you know, for all time, which it wouldn’t, that he should go for the stuff that will help the economy now…

Great Depression

In the Great Depression, people listened to Franklin D. Roosevelt urge full employment, on their radios; this statue is part of the FDR Memorial in Washington, D.C. – Photo credit: Koshyk

We happen to have a very intelligent man as president. He’s for real. And he does understand. You can have real discussions with him. And I think he understands that, although things have improved some… it’s a glacial pace, compared with the way we should be… We cannot allow ourselves to be blackmailed into spending cuts, partly because blackmail should not be part of how the U.S. operates, and partly because spending cuts would be disastrous right now. So Obama’s right to say he doesn’t negotiate. I’d like to know exactly what he will do if it turns out that there is not a quorum of sane people in the Republican party.”

ON THE LONG-TERM DAMAGE OF A BAD JOB MARKET
“We have pretty good evidence on how long does it take to make up for the fact that you happen to graduate from college into a bad labor market. And the answer is forever… You’ll miss years getting onto the career ladder. By the time you get a chance to get a job that makes any sense, you know, that makes any use of your skills, you will already be tarred as somebody, ‘Well, you’re 28 years old and you haven’t held a responsible position?’ ‘Well, yeah, I couldn’t because there were no jobs.’ It just shadows your whole life. And it’s very clear in the evidence from past recessions, which have been nowhere near as bad as this one.” Watch this clip.

ON COVERING BOTH THE ECONOMY AND POLITICS
“If you write about economics right now and implicitly adopt the perspective, ‘Well, let’s get reasonable people together in Washington and reach a solution here,’ you’re paying no attention to reality. And, of course, if you talk about the politics without talking about the economics, you’re also missing everything. So how could I not be writing about both?”

More:

5 Comments | Economics, Employment, Politics, Taxes | Tagged: , , , , , , , | Permalink
Posted by Ed Darrell

December 31, 2012: Bright Idea Day, anniversary of Edison’s light bulb

December 31, 2012

Between Christmas and New Year’s Day, here at Millard Fillmore’s Bathtub we celebrate a variety of historically holy days.  December 31, by tradition, is Bright Idea Day, the anniversary of the day Thomas Edison demonstrated for the public a working light bulb in 1879.

100,000 people gather in Times Square, New York City, tonight, and millions more around the world, in festivities for the new year made possible by the work of Thomas Alva Edison.

Here it is, the invention that stole sleep from our grasp, made clubbing possible, and launched 50,000 cartoons about ideas:

The light bulb Thomas Edison demonstrated on December 31, 1879, at Menlo Park, New Jersey - Wikimedia image

The light bulb Thomas Edison demonstrated on December 31, 1879, at Menlo Park, New Jersey – Wikimedia image (GFDL)

The light bulb. It’s an incandescent bulb.

It wasn’t the first bulb. Edison a few months earlier devised a bulb that worked with a platinum filament. Platinum was too expensive for mass production, though — and Edison wanted mass production. So, with the cadre of great assistants at his Menlo Park laboratories, he struggled to find a good, inexpensive filament that would provide adequate life for the bulb. By late December 1879 they had settled on carbon filament.

Edison invited investors and the public to see the bulb demonstrated, on December 31, 1879.

Thomas Edison in 1878, the year before he demonstrated a workable electric light bulb. Library of Congress image

Thomas Edison in 1878, the year before he demonstrated a workable electric light bulb. CREDIT: Thomas Edison, head-and-shoulders portrait, facing left, 1880. Prints and Photographs Division, Library of Congress. Reproduction number LC-USZ62-98067

Edison’s successful bulb indicated changes in science, technology, invention, intellectual property and finance well beyond its use of electricity. For example:

  • Edison’s Menlo Park, New Jersey, offices and laboratory were financed with earlier successful inventions. It was a hive of inventive activity aimed to make practical inventions from advances in science. Edison was all about selling inventions and rights to manufacture devices. He always had an eye on the profit potential. His improvements on the telegraph would found his laboratory he thought, and he expected to sell the device to Western Union for $5,000 to $7,000. Instead of offering it to them at a price, however, he asked Western Union to bid on it. They bid $10,000, which Edison gratefully accepted, along with the lesson that he might do better letting the marketplace establish the price for his inventions. Other inventive labs followed Edison’s example, such as the famous Bell Labs, but few equalled his success, or had as much fun doing it.  (Economics teachers:  Need an example of the marketplace in action?)
  • While Edison had some financial weight to invest in the quest for a workable electric light, he also got financial support, $30,000 worth, from some of the finance giants of the day, including J. P. Morgan and the Vanderbilts who established the Edison Light Company.
  • Edison didn’t invent the light bulb — but his improvements on it made it commercial. “In addressing the question ‘Who invented the incandescent lamp?’ historians Robert Friedel and Paul Israel list 22 inventors of incandescent lamps prior to Joseph Wilson Swan and Thomas Edison. They conclude that Edison’s version was able to outstrip the others because of a combination of three factors: an effective incandescent material, a higher vacuum than others were able to achieve (by use of the Sprengel pump) and a high resistance lamp that made power distribution from a centralized source economically viable.”
  • Edison’s financial and business leadership acumen is partly attested to by the continuance of his organizations, today — General Electric, one of the world’s most successful companies over the past 40 years, traces its origins to Edison.

Look around yourself this evening, and you can find a score of ways that Edison’s invention and its descendants affect your life. One of the more musing effects is in cartooning, however. Today a glowing lightbulb is universally accepted as a nonverbal symbol for ideas and inventions. (See Mark Parisi’s series of lightbulb cartoons, “Off the Mark.”)

Even with modern, electricity-saving bulbs, the cartoon shorthand hangs on, as in this Mitra Farmand cartoon.

Fusilli has an idea, Mitra Farmand, Fuffernutter

Brilliant cartoon from Mitra Farmand, Fuffernutter

Or see this wonderful animation, a video advertisement for United Airlines, by Joanna Quinn for Fallon — almost every frame has the symbolic lightbulb in it.

Other resources:

Patent drawing for Thomas Edison's successful electric lamp. Library of Congress

Thomas Edison’s electric lamp patent drawing and claim for the incandescent light bulb CREDIT: “New Jersey–The Wizard of Electricity–Thomas A. Edison’s System of Electric Illumination,” 1880. Prints and Photographs Division, Library of Congress. Reproduction Number LC-USZ62-97960.

Yeah, this is mostly an encore post.

Even More, in 2012:

Leave a Comment » | Creativity, Economics, Electricity, Gilded Age, Historic documents, History, History of Science, Invention, Patents, Progressive Era, Science, Technology | Tagged: , , , , , , , , , , , , , , | Permalink
Posted by Ed Darrell

Texas secessionists ecstatic . . . over what, they don’t know

November 30, 2012

Not sure how I got on the mailing list, but I’ll take it.

Texas bugs out on the U.S., by Paul Windle

Graphic for the New York Times, by Paul Windle

To those who commented here that the Texas secessionists are joking, and the petition means nothing at all, please note the e-mail I got today from Roxanna M.  Roxanna is the thoughtful person behind the petition AGAINST the Texas secession petition.  Heed what she says:

Hey friends!

I want to thank each of you again!  I’ve received so many emails, and I am going to be getting back to everyone, but I work two jobs so it will take me a bit.  But thank you all for your interest and your support.  It’s amazing.  There are a couple people, though, that have sent emails calling me some not-so-nice names.  I will not be responding to you, aside from this.  Thanks for being engaged and interested enough to respond, though.

I have had quite a few requests about how many signatures we have so far.  As of today this petition has 13,011 signatures. [Emphasis added here] I think we’re off to a pretty good start!  This is my first petition, so I am open to any suggestions or ideas any of you have.

I checked the “We the People” petition the day I sent out the other email, and yes, at that time the number was 117,889.  I checked it twice.  The number at that time was accurate.  It may be more now.  Unfortunately, my roommate also sends me random text messages when they get more signatures on the petition.  He was very excited when they hit 100,000.

Here’s where you can find the petition to secede:
https://petitions.whitehouse.gov/petition/peacefully-grant-state-texas-withdraw-united-states-america-and-create-its-own-new-government/BmdWCP8B

It’s actually at 118,203 as of today.

I honestly have no idea how they plan on Texas to go it alone.  There’s a lot of boasting about the our economy and how it’s the best, but I haven’t seen or heard a concrete plan as of yet.  I have heard hints that if Texas isn’t granted a peaceful secession then this could end up another Civil War.  I certainly hope not, and tend to ignore those comments, but things like that are being said.

I do not have a Facebook page for the petition.  I have posted links on Facebook, like on Formidable Republican Opposition’s page.  If anyone wants to start one, feel free!  Just let me know and I’ll send out an email with the link.  I’ve gone to a couple forums for Texas Democrats/Independents and posted links as well.  But, like I said, I’m new at this, and I work two jobs, so if any of you have ideas I’m happy to hear them.

I know that I made some grammar mistakes in the petition, and I apologize.  Unfortunately, once someone signed it (besides me), it wouldn’t let me revise it.  So yeah.  We’ll make do, hopefully.

For those of you who would like to read a bit on the secession petition:

Star-Telegram article
http://www.star-telegram.com/2012/11/20/4429851/a-peaceful-texas-secession-would.html

Examiner article with links of sites supporting Texas secession:
http://www.examiner.com/article/texas-secession-petition-response-white-house-deadline-nears-1

Any other questions, comments, concerns, just let me know.  You all are absolutely fantastic!  Thanks so much! [Note this is the petition AGAINST secession.]
http://signon.org/sign/texans-against-secession?mailing_id=7220&source=s.icn.em.cr&r_by=6253019

Many of those who signed and advocate Texas secession appear to lack an idea of scale, as well as any idea about how government works in a constitutional federal republic.

118,000 signatures from Texas?  Wholly apart from the not-really-joking suggestion that at least 50,000 of those come from Oklahoma, that’s less than the population of rural-to-suburban, southern Dallas County.  Duncanville, Desoto, Cedar Hill, and Lancaster, and all the unincorporated nodules at sea in the area, can’t get Dallas County to pay much attention to them, let alone Texas, let alone the U.S. Congress to consider letting such a tiny group secede.  Compare the 118,000 with more than 3 million Texans who voted for Obama, consider the most of the more-than 3 million who voted for Romney and consider themselves proud citizens of the U.S. who would never consider secession, and at least ten million other Texans who think secession is a stupid idea, and you get a clue as to how inconsequential 118,000 people can be.

Please consider the facts; as John Mashey suggests, and as Roxanna warns, let the secessionists make their case, and tally the costs and benefits.  It’s not a pleasant tally:

  • Gov. Rick Perry opposes the idea, dismisses it as silly and says to move on — he’s otherwise a rather randyesque maverick who loves to slam the federal government if it’ll get him a few votes or a case of beer, or a favor from a businessman.  Truth be told, Perry still thinks he can be president of the U.S., which would be impossible were Texas to secede, and even unlikely were secessionists to get any traction from the state government.
  • On straight up accounting, federal income taxes versus direct aid from the federal government to Texas, Texas is modestly a payer rather than a taker of federal largesse.  However, that accounting does not include the several Air Force Bases, Navy installations, major Army and Marine facilities, Houston’s NASA Control Center, and other federal establishments in the state.  Texas pays almost nothing for border protection, for example, while it costs billions just along the Texas-Mexico border; Texas cannot protect its own borders without the U.S.  Texas is an economic shell waiting to collapse, without the U.S.  That does not account for the several dozens of Fortune 500 companies headquartered in Texas, who would have to move out, to stay domestic corporations.  This includes Exxon-Mobil, AT&T, Frito Lay, and dozens of others.
  • If anyone in the Texas Lege thinks it’s a good idea, they’ve got the good sense to keep quiet about it.  Texas needs federal money to balance its budget, and the Texas Constitution requires a balanced budget.  As a nation, Texas would have to borrow big time, probably spend into deficits (as responsible nations do from time to time) — that is not a popular idea among Texas conservatives, who would be the most likely supporters of secession.
  • With no one in the state government supporting the idea, 117,000 signatures on a petition is about the number of Texans Rick Perry snubs his nose at on a daily basis.  The Great State of Texas is not a signatory to any secession idea.  Congress won’t agree anyway, but especially Congress won’t act contrary to the State of Texas’s wishes.
  • While the First Amendment specifically protects American citizens’ right to petition for redress of grievances, there is no process set by which that is done on such issues, really.  Notice this petition is really just a letter of suggestion to the President, and not any requirement for any action.  Obama likes to listen to citizens (no comment on previous people holding his position, of course); this “We the People” process is a public outreach effort by the Obama administration.  Their promise is, if there is a serious issue, they’ll work to answer questions.  The informal process is, on any issue, serious or not, they’ll answer if there are more than 25,000 people who ask (“sign the petition”).  By gathering 117,000 signatures, those people have earned the right, under Obama’s magnanimity, for a letter.  That letter will probably say, “Sorry you’re disappointed, but we will continue to be the united states, in the United States of America.”
  • Were it a petition to Congress, there is still no requirement for any action. The Constitution forbade Congress from even discussing action against slavery for 20 years after the document became effective, Article II Section 9.  During that time, thousands of Americans petitioned Congress to end slavery.  Congress noted the receipt of those petitions somewhere, and did nothing.  After 1808, Congress received thousands of other petitions, and while taking note of them, rarely did anything about them.  We have a right to petition the government for redress of grievances, and that prevents us from being thrown into jail for pointing out the government is screwing up.  But that right ends with the petition.  There is no right of any response, nor are such petitions considered demands that government actually act.  Secessionists seem almost giddy that if they get a bunch of signatures, secession is a reality.  That’s some potent moonshine, but it’s no more than moonshine talking.

John Mashey suggested in another thread that secessionists should start running the numbers now.  They might learn from people who wanted the Iron Curtain to fall, for more than 40 years.  They seriously thought about how to fix things, and in much of Eastern Europe, once the oppressive communist regimes fell, serious people stepped up to make serious reforms in government, and some good stuff resulted — see the Czech Republic, Germany’s reunification, the economic boom and increased liberty in Poland, and the great increase in business in Estonia, for examples.  In sharp contrast, the Muslim Brotherhood complained about Egypt’s government for 50 years.  But when that government fell (not much thanks to the Muslim Brotherhood), it turned out they had not thought about how to actually run a nation; after more than a shaky year and a questionable election, the government is still wracked by demonstrations by nominal allies of the government, asking reforms of actions the former Muslim Brotherhood member President Morsi has already taken.

For good government to work, first, government must work.  Texas secessionists have not even thought through a secession process, let alone how to make things work afterward.

But Roxanna notes secessionists have given little thought to any serious next step, even of just getting a letter from President Obama.  Roxanna hasn’t seen any analysis, nor has anyone else.

Take Mashey’s suggestion, secessionists, and start running the numbers.  It will help you avoid disappointment soon, in the near-future, and perhaps for the rest of your life.

Yesterday Kathryn and I toured the National Memorial in Oklahoma City.  It is a grim, curt and hard reminder that political discontent can drive malcontents to horrific action.  Secessionists need to rein in their rabid nationalism before it destroys their patriotism.  Timothy McVeigh had a plan to try to cut things asunder, but nothing else other than ill-intent.

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Posted by Ed Darrell

Cliffhanger avoidance, from Robert Reich

November 30, 2012

Economist/policy wonk/good guy Robert Reich sends along notes on the discussions in Washington (at his Facebook site, and at his personal site) (links added here for your benefit and ease of use):

Robert Reich

Rhodes Scholar, former Secretary of Labor and UC Berkeley Prof. Robert Reich

Apparently the bidding began this afternoon. According to the Wall Street Journal (which got the information from GOP leaders), Tim Geithner met with Republican leaders and made the following offer:

— $1.6 trillion in additional tax revenues over the next decade, from limiting tax deductions on the wealthy and raising tax rates on incomes over $250,000 (although those rates don’t have to rise as high as the top marginal rates under Bill Clinton)

— $50 billion in added economic stimulus next year

— A one-year postponement of pending spending cuts in defense and domestic programs

— $400 billion in savings over the decade from Medicare and other entitlement programs (the same number contained in the President’s 2013 budget proposal, submitted before the election).

— Authority to raise the debt limit without congressional approval.

The $50 billion in added stimulus is surely welcome. We need more spending in the short term in order to keep the recovery going, particularly in light of economic contractions in Europe and Japan, and slowdowns in China and India.

But by signaling its willingness not to raise top rates as high as they were under Clinton and to cut some $400 billion from projected increases in Medicare and other entitlement spending, the White House has ceded important ground.

Republicans obviously want much, much more.

The administration has taken a “step backward, moving away from consensus and significantly closer to the cliff, delaying again the real, balanced solution that this crisis requires,” said Senate Minority Leader Mitch McConnell (R., Ky.) in a written statement. “No substantive progress has been made” added House Speaker John Boehner (R., Ohio).

No surprise. The GOP doesn’t want to show any flexibility. Boehner and McConnell will hang tough until the end. Boehner will blame his right flank for not giving him any leeway — just as he’s done before.

It’s also clear Republicans will seek whatever bargaining leverage they can get from threatening to block an increase in the debt limit – which will have to rise early next year if the nation’s full faith and credit is to remain intact.

Meanwhile, the White House has started the bidding with substantial concessions on tax increases and spending cuts.

Haven’t we been here before? It’s as if the election never occurred – as if the Republicans hadn’t lost six or seven seats in the House and three in the Senate, as if Obama hadn’t won reelection by a greater number of votes than George W. Bush in 2004.

And as if the fiscal cliff that automatically terminates the Bush tax cuts weren’t just weeks away.

But if it’s really going to be a repeat of the last round, we might still be in luck. Remember, the last round resulted in no agreement. And no agreement now may be better than a bad agreement that doesn’t raise taxes on the wealthy nearly enough while cutting far too much from safety nets most Americans depend on.

If Republicans won’t budge and we head over the fiscal cliff, the Clinton tax rates become effective January 1 – thereby empowering the White House and Democrats in the next congress to get a far better deal.

Watch that space.

It’s especially interesting to me how House Minority Leader Nancy Pelosi (D-California) and Senate Majority Leader Harry Reid (D-Nevada) will work to get a solution, if the GOP continues its blockade to almost all action.

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5 Comments | Barack Obama, Economics, Government, History, Politics, President Obama, U.S. Congress, U.S. House of Representatives, U.S. Senate | Tagged: , , , , , , , , , , | Permalink
Posted by Ed Darrell

“I, Pencil,” updated and animated — and not so offensive as I expected

November 23, 2012

Every economics teacher knows that old Leonard Read piece, “I, Pencil.”   It’s a good, practical demonstration of the concept of Adam Smith’s “invisible hand,” free markets, and the way economies put stuff together for sale without a government agency issuing instructions, written by Read in 1958, for the Foundation for Economic Education, a once-free-market economic think tank that recently made an unexpected (by me) lurch to the radical right.

The essay is dated, though, for high school kids today.  Most of the stuff Read properly assumed people knew something about, is left out of modern curricula in elementary and middle school, so a high school teacher must do remedial work in mining, international trade, lumbering, manufacturing, chemistry and metallurgy, just to make the thing make sense.  Where we used to learn about pencils in first or second grade, my students in recent years labor under the misconception that pencil leads are made out of lead, and I have to explain to them that graphite is a form of carbon.  They don’t know cedar from pine, or mahogany, they don’t know copper from tin from zinc from steel, and they think rubber has always been synthetic.

Imagine my surprise on this:  I got an e-mail touting an animated, YouTube update of Read’s essay. It’s not bad, even though it’s from the Competitive Enterprise Institute, which is neither competitive, nor an institute, but is instead a propaganda arm of crazy right-wing wackoes.

Whoever made this film appears not to have had much interference from the CEI poobahs.

Am I missing something? Is this film more right-wing than I see?

I worry that I missed something, or that the producers of this movie wove a spell over the usual radical near-fascist groups.  This movie has been touted in recent days by almost all of the usual crypto-black-shirt think puddles, American Enterprise Institute, the unreasoning Reason magazine from the so-called libertarian view, the cartoonish Glen Beck effluent pipe The Blaze, the Coors family’s Heritage Foundation, the offensively-named Lexicans, the biased Cafe Hayek (which is often a good read anyway, so long as you don’t take them seriously on any science issue),  the sanctuary for authoritarian-leaning victims of lobotomy Hot Air, and even that publication from the propaganda organization, The Daily Capitalist — in short, it’s been plugged by organizations covering the entire political spectrum from Y to Z, the far right end of the alphabet.

Maybe they didn’t watch it? 

For today’s teenagers, someone should do a couple of updates.  “I, SmartPhone” and “I, Tablet Computer” could include lessons in government regulation of radio spectrum and how such regulation allows public safety functions and air traffic control to exist alongside great profit-seeking groups, and how such developments would be impossible without government regulation. There would also be a section on the mining and milling of rare Earths, of ores like Coltan, which would introduce the concept of blood or conflict diamonds and ores, the collapse of order in unregulated areas like Congo and Somalia, slave labor as in Pakistan and China.  “I, Fast Food Breakfast” could include side lessons in importing of orange juice from Brazil and other nations, artificially-flavored syrups from China and the threat from climate change to U.S. maple tree farmers, and meat from Australia and Argentina, along with the ideas of food safety regulation on eggs and egg products by USDA and FDA.  “I, Burrito” could include lessons in cultural diffusion and migrant farm workers who pick the tomatoes . . .

By the way, the fact that pencil leads are graphite (and clay), and not lead, should not be taken to mean that pencil manufacturers came up with a kid-safe product on their own; lead in the paint on pencils was enough to worry the health officials, until regulation got different paints used.

We need a classroom guide on Read’s piece and this new movie that seriously discusses the need for regulation in pencil manufacture, from the safety of the saws used to cut the trees, and in the mills, to the anti-child labor provisions of the graphite and rubber import agreements, to the forest regulation and research necessary to keep the incense cedar wood in production, through the anti-deforestation requirements on rubber plantations and the regulation of lead in the paint.  The movie is good, much less right-wing than those groups who fawn over it, but still in need of some real-world economic reality.

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7 Comments | Economics, Food Safety, Freedom - Economic, History, Regulation | Tagged: , , , , , , , , , | Permalink
Posted by Ed Darrell

Reich’s right, again: Budget deficits are NOT the problem

November 16, 2012

Robert Reich‘s so good he can dispense wisdom in four 140-character Tweets:

His three following Tweets:

1. The real issue is ratio of deficit to total economy. If economy grows, deficit shrinks in proportion. That’s why austerity dangerous.

2. Public investments in education, infrastructure, and basic R&D should be made regardless, if public return is greater than their cost.

3. Biggest driver of future deficits rising healthcare costs (Medicare & Medcaid) but they’re slowing, so deficit projections exaggerated.

Three simple points.

Robert Reich speaks at the World Affairs Council

Robert Reich speaks at the World Affairs Council (Photo credit: tharpo)

To get more people to understand those points, Reich and his friends want to put out a film — but they need cash to finish it off, and they ask for your contribution

Alas, I can’t embed the proprietary video format here on WordPress. So you’ll have to go to the KickStarter site to see the trailer and money plea. Please do.

Print it out on a 3 x 5 card for your boss, if you’re the secretary to a Member of Congress, eh?

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4 Comments | Economics, Politics | Tagged: , , , , | Permalink
Posted by Ed Darrell

What about National Parks as an issue in the 2012 elections?

October 16, 2012

National Parks really are a tiny part of the federal budget.  Consequently, they get overlooked, and that could be bad.

How are your Congress and Senate candidates standing on these issues?

Romney’s “energy plan” calls for opening up the National Parks for oil and gas exploration and drilling, even the Flight 93 Memorial in Pennsylvania  Bet that’s not mentioned by anyone in the debate tonight.

Which one is your favorite unit of the National Park System?  What’s your favorite family story from visiting the parks?  How are you going to vote in November?

Graphic from the National Parks Conservation Association:

Parks in Jeopardy, 2012, NPCA

From the National Parks Conservation Association

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Leave a Comment » | 2010 Elections, 2012 Campaigns, Conservation, Economics, National Parks, Outdoor Recreation | Tagged: , , , , , , | Permalink
Posted by Ed Darrell

12 million jobs — but not until when?

October 16, 2012

Oy.

It’s extraordinary to consider with just three weeks until Election Day, but Mitt Romney’s central argument to voters has been exposed as a total fraud.

Greg Sargent added, “Let’s recap what Kessler has discovered here. The plan that is central to Romney’s candidacy on the most important issue of this election — jobs — is a complete sham. This is every bit as bad — or worse — than Romney’s claim to have created 100,000 jobs at Bain, or his vow to cut spending by eliminating whole agencies without saying which ones, or his refusal to say how he’ll pay for his tax cuts.”

Obama’s budget NOW creates 12 million jobs in the next four years, according to projections.  Romney?  He stretches it out to ten years, but reduces the job creation, so it’s 2.5 times as long to get the same number of jobs.  Say what?  Romney’s plan reduces the number of jobs created by cutting the rate at which they are created.

Read more at Rachel Maddow’s blog, with links to the actual studies.  Maddow links to Greg Sargent’s blog, The Plum Line, at The Washington Post. 12 million jobs, Mitt Romney, economy, Bain Capital

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Leave a Comment » | 2012 Campaigns, 2012 Elections, Campaigns, Economics, Elections, Employment | Tagged: , , , , , , , , | Permalink
Posted by Ed Darrell

Here’s a fine kettle of apples you’ve gotten us into . . . cheapskate

October 14, 2012

Apples are an all-American success story-each ...

Apples are an all-American success story-each of us eats more than 19 pounds of them annually. Photo credit: Wikipedia

Noticed any increase in food prices yet?

Here in Texas, all meat prices are up, but especially beef.  Beef ranchers in Texas sold off their herds because they couldn’t feed them during the drought, except with very expensive imported hay.  That held prices down for a while, but now there is a lot less beef to be bought.  Prices rise.

Drought also hammered corn crops this year, and last year.  To keep corn markets growing, corn state legislators had gone whole hog into using corn for alcohol to be added to gasoline.  That demand didn’t drop with the crop decreases, however, and we’ve been hearing for months how corn-into-alcohol pressures food markets.

Lucio Machado picks Golden Delicious apples in a Washington orchard. Goodfruit.com

Lucio Machado picks Golden Delicious apples in a Washington orchard. Goodfruit.com

Drought hammers our fruit crops, too.  Comes now news from Washington state about the added wrinkle:  Washington’s apple crops bend the tree boughs — who will pick them?

Two key problems:  First, the crackdowns on immigrant workers reduced supply dramatically.  Second, citizens or documented workers find higher pay in the turnaround in construction.

Result:  Apples may stay in the trees, boosting apple prices to consumers.

Wholly apart from the foolish denial that we need to do something about global warming, the added policy flaws of shutting off immigration flow on the chuckle-headed and wrong assumption that immigration hurts the economy, and the continued denial of our too-modest economic recovery, will now cost you money directly at the supermarket.

The Wall Street Journal reported:

PASCO, Wash.—Washington state is enjoying the second-biggest apple crop in its history, but farmers warn they may have to leave up to one-quarter of their bounty to rot, because there aren’t enough pickers.

“I’m down 40% from the labor I need,” said Steve Nunley, manager of a 3,000-acre apple orchard for Pride Packing Co. in Wapato, Wash. Mr. Nunley said he has 200 pickers right now, but needs close to 400. He has increased pay to $24 for every 1,000-pound bin of Gala apples they pick, compared with $18 last year. Even so, he expects to have to let tons of fruit fall unpicked this season.

Washington’s bumper crop, forecast at 109 million boxes of Red Delicious, Gala, Granny Smith and other varieties, comes as drought and poor growing conditions have led to dismal harvests in parts of the U.S. Michigan lost much of its apple crop this year, and poor conditions have depressed the yields in New York state and North Carolina.

And:

But Washington’s farmers can’t fully cash in on their good fortune. The national crackdown on illegal immigration has shrunk the pool of potential farm workers in the state, while at the same time, the modest economic rebound has given immigrants more opportunities than before in construction, landscaping and restaurants.

*   *   *   *   *

Not far away, outside a church in Pasco, a migrant from Mexico’s Michoacán state, 47-year-old José Carranza, said he planned to skip the fruit harvest this year. Mr. Carranza believes he can do better in construction work, which is picking up.

How bad is it, really?  Take a look at several other pieces on this issue, recently:

How much additional will you be paying for goods this year because of GOP “we-can’t-afford-to-be-great-anymore” policies, or racist immigration policies?  Will your modest tax cuts offset that expense?

Perhaps we should pay a bit more in federal money to help fix the real problems, and stop pretending that the price of everything is the same as the cost.

You know the aphorisms:  A conservative economist is a person who can tell you price of any item or service, but doesn’t know the value of education, parenting, or good social structure, and ignores the costs of doing nothing.

And the Tom Magliozzi Law (of the Car Guys):  The cheapskate always pays more.

Studies from the Federal Reserve indicates immigrants boost our economy greatly; making life tough for immigrants, or hoping they’ll “self-deport,” damages our economy.

How’s that applesauce?

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7 Comments | Agriculture, Climate change, climate_change, Economics, Farming, Global warming, History, Immigration, Politics | Tagged: , , , , , , , | Permalink
Posted by Ed Darrell

Ben Stein off the rails again

October 10, 2012

Ben Stein is nominally a smart guy, with a degree in economics and a law degree and enough moxie to wangle his way into the movies . . . lives a sort of a charmed life.

Ben Stein

Ben Stein

Which may be good on one hand, because he runs off the rails sometimes.  Bad on the other hand if others follow him off the rails, assuming he’s smart and knows where he’s going.

Stein’s latest droppings at American Spectator include this gross misunderstanding of the drive for justice and equality (all links added here):

But right now, which is Sunday, I am looking in my favorite book, Bartlett’s Familiar Quotations, for a quote by Hayek about how you cannot clearly associate economic effects with economic causes because so many different circumstances are at work each time.

I cannot find that quote in this edition — maybe a 1976 edition — but I did find a better one from Hayek which I paraphrase here: the attempt at social justice causes more misery than almost any other factor in human life (again, a paraphrase).

Yes. The Communists. The Jacobins. The Communards. The Maoists. The Khmer Rouge. They all caused untold suffering in the phony and vain attempt to make everyone equal… phony because it was just a fig leaf for terrible people to seize power.

We are not supposed to be all equal. Let’s just forget that. We are supposed to have equal rights under law. If we do that, we have done enough. If we try to engineer outcomes, if we overturn tradition to make everyone the same, we ruin society. If we upset tradition to allow for an equal shot at the starting gate, everyone wins, except for the charlatans and would be dictators.

Yet another reason to be a Republican. Give everyone an equal shot — but do not require equal outcomes or even roughly equal outcomes by law. That way lies catastrophe.

Every soul deserves a shot at a Cadillac, but not everyone should be guaranteed a Cadillac… that way lie the tumbrels and the guillotine.

Other groups in history caused untold suffering in the phony and vain attempt to keep everyone from having equal rights.  What’s his point, that he’s forgotten history and has so far avoided a visit from Santayana’s Ghost?

Consider the anti-Jacobins, the monarchy and strict class system against which the French revolted — better?  The Jacobins themselves were mostly upper-class, including a future King of France among them, and the club being composed almost completely of wealthy people or merchants on the rise, quite like a modern Republican-leaning country club.  Does Stein really know this history?

Communards organized and rebelled against a patrician government (think Occupy Wall Street with real venom, tired of eating cats and rats, and with the support of hungry front-line soldiers who sympathized with them).  They did not perpetrate misery in support of social justice, not so much as 18,000 Communards were murdered to put down the rebellion and  continue the social injustice, several thousands more were executed, and a few thousands were “deported” to prison colonies in New Caledonia.  Stein seems to have this history exactly backwards — it was the GOP-style Bismarck-Farve alliance that delivered misery to perpetuate inequality.

One might make a claim that the Maoists in China worked for a degree of a classless society, but not on the scale and not with the success of George Washington — which is probably a clear view into why Mao’s successors beat such a hasty retreat to more capitalistic-bent programs, but still leaving the peasants in the countryside and especially coal miners on the short end of the rights stick.  It’s simply fatuous to claim the Khmer Rouge worked to make people equal under the madman dictator Pol Pot.  It’s  a good, short debate line, but it doesn’t stand up to scrutiny of history — and remember, it was the communist North Vietnamese Army who chased Pol Pot out of power and restored order to Cambodia.

Consider the Roman Empire (which oddly is more akin to modern U.S. Republicans than the Roman Republic), or Czarist Russia before the Bolsheviks.  It’s not like the failed attempts by so-called communists brought down societies that honored equality for citizens.  Stein has the telescope of history by the wrong end, which means he really can’t see what he’s claiming to describe.

Did Hayek really say that working for social justice is error?  I doubt it.  He wrote about wrong-headed attempts to impose social justice, like keeping everyone from having a Cadillac, through formal legal means, or through informal, economic and class means such as closing off opportunities for the poor and middle class to rise.  Stein, a Jew with an Ivy League education, should be sensitive to the closing of opportunities, and appreciative that opportunities are generally open in this nation.  Religion once operated as keys the doors to Ivy League schools, to the detriment of Jews; once recast, those keys provided a door to economic and intellectual achievement for many Jews.

Stein’s column is titled “A Reason to Be Republican.”  Instead he outlines reasons to question the current Republican platform and candidates for the presidency, U.S. Senate and U.S. House of Representatives.  Somehow he confuses Republican policy with the phrase “Equal Justice Under Law,” the words engraved on the West Portico of the U.S. Supreme Court.  It’s useful at such times to remember the building was completed in 1935, and that its design and construction was supervised by Chief Justice William Howard Taft, the former Democrat.  It’s also useful to remember that the GOP has fought against those words ever since, but especially after Richard Nixon determined to jettison GOP dedication to civil rights for African Americans, women and Hispanics, in pursuit of electoral success with the votes of bigots from the South angry at the Democratic Party for having successfully pushed the Civil Rights Act of 1964 and the Voting Rights Act of 1965.  Stein wrote speeches for Nixon.  He should remember that history better, or study it more if he can’t recall.

Especially not the rich should be guaranteed a Cadillac by the government.  They already have the money to get what they need; but having money should not confer rights to take everything while walking on the heads of the middle class and poor.  Everyone deserves a shot, Stein said.  I wish he’d support that claim with his actions, his political contributions, and his endorsement of candidates.

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Leave a Comment » | Economics, Free market economics, Freedom - Economic, Freedom - Political, History | Tagged: , , , , , , | Permalink
Posted by Ed Darrell

Why Obama Now?

October 7, 2012

Obama’s own words, with animation provided by Lucas Gray, a veteran animator from The Simpsons and Family Guy.

Andre Tartar wrote about it at the New York Magazine website:

Your average campaign ad involves lots of black and white B-roll, ominous music, and floating newspaper headlines. So this nearly 4-minute illustrated reel by Lucas Gray, a veteran of the Simpsons and Family Guy animation departments, is a welcome bit of color. Using audio from a speech President Obama gave at the Associates Press Luncheon in April, “Why Obama Now” is a jaunty mix of cartoon Americans driving their Model T Fords off the assembly line onto the American Dream, graphs and charts sprouting up as the president rattles off statistics, and little bobblehead meanies providing comic relief: Bush and Cheney with a pile of gold (the Clinton surplus), Sarah Palin, Bill O’Reilly, and the rest of the conservative pundit gang. It also includes the best (though not most convincing) explanation of trickle-down economics we’ve seen yet: “If you feed the horse enough oats, some will pass through to the sparrows.”

At the website for WhyObamaNow.org, the sources are listed:

  1. Obama’s speech to the Associated Press luncheon on April 3, 2012, at the Marriott Wardman Park
  2. Other sources for graphs shown throughout the video
  3. Transcript of the entire speech

The entire speech (58 minutes — 36 minutes for the prepared text, plus Q&A):

Leave a Comment » | animation, Barack Obama, Economics, History, Politics, President Obama | Tagged: , , , , , , , , , | Permalink
Posted by Ed Darrell

One more time, again: Why “supply side” economics doesn’t work without demand

October 4, 2012

I posted a short excerpt from a recent column by economist Paul Krugman, explaining why GOP reliance on magic to fix the economy probably won’t work.  Commenter David Xavier took issue with Krugman’s analysis.  David’s comment brought home to me just how badly many self-described conservatives misunderstand basic economics, especially the keystone free enterprise principles of supply and demand.

My explanation of why supply side economics can’t work came out for the 21st time at least.  Let’s make a post of it, in hope that more people may read it and view it, and understanding may increase.

David Xavier said:

Krugman wants the government to spend as this will drive demand. But “demand is constituted by supply”. To buy something you must first produce and sell something. The selling is what gets you the money, but the production of value adding output is what first allows you to sell. Without value adding activity, there is nothing to sell and therefore there is no basis for demand.

I replied:

Well, there’s the problem. You don’t understand either the law of supply, nor the law of demand. You’re talking “supply side” economics, which we discovered didn’t work way back in 1982 through 1988.

Supply does not stimulate demand, ceteris paribus. It’s the other way around. Henry Ford’s Model A didn’t created demand for transportation; the demand for transportation, coupled with a demand for transportation that didn’t involve horses and their natural effluents, created a demand for a horseless carriage. Ford created a machine that met that demand, and could manufacture it in enough quantity to matter.

Demand is not “constituted from supply.” Demand comes from needs, and wants. If supply can be created to meet that demand, demand can be met from supply.

But demand comes first, as Krugman, a Nobel-winning economist, well understands.

If consumers have no money to buy, the quantity supplied cannot matter in the least. If there were no demand for transportation at all, Henry Ford is sunk.

The law of supply explains how producers go about meeting demands — if prices are higher, they are happier to supply more. Again, if consumers have no money to purchase the good or service offered, the amount of supply is completely irrelevant.

Before Henry Ford’s mass production of automobiles created a demand for gasoline, gasoline was cast off from oil refining as a waste product from the production of kerosene for lanterns. Refineries from Standard Oil dumped millions of gallons of gasoline into rivers — no demand, the massive supply simply did not matter.

And as we can see from that example, demand not only creates the market, it can make a product considered to be waste, into the economic equivalent of gold.

Without demand, supply is simply excess manure, or gasoline by-product from the production of kerosene, to be dumped into a river (and thereby pollute the hell out of the river).

You’re right to say that without value-added activity, there is no economic activity. But tell that to Mitt Romney, who thinks finance is the magic, and not production.

A key problem with all of Republican economics is the ignoring of consumers, and ignoring the reality that consumers need money to stimulate demand. Tax cuts can’t help the hungry, who cannot eat tax cuts, nor the unemployed, who cannot take to the bank tax cuts on non-existent income.

Your odd myopia — maybe blindness — to the reality of how economics works, is shared by a lot of so-called conservatives. It’s a tragedy; it’s a tragedy I hope voters will put an end to, soon.

Did you ever notice that no supply-side economist has ever won a Nobel? Have you noticed that few supply-side economics articles are available in journals? Has your search for the numbers to back up the Laffer curve been as unproductive as they have been for everyone else — including Arthur Laffer? (Laffer promised to publish an article explaining how supply side economics work, as soon as he got the numbers together. That was in 1982. 40 years later, there is still no real intellectual foundation for GOP claims of tax cuts creating wealth. Those studies that have been done suggest tax rates maximize revenue when taxes hit about 70%, more than three times the rates Laffer proposes. History shows a much different story than Laffer claimed: Tax cuts in the Harding and Coolidge administrations led to bubbles that collectively burst in October 1929, leading to the Great Depression; tax cuts in 2001 led to bubbles in housing and the stock market, which burst in 2008, leading to our Great Recession.)

Right now, businesses are sitting on a pool of about $2 trillion, profits they’ve accumulated since 2008. If supply side economics worked, that money would be invested in manufacturing and service creation, and we should have an unemployment rate in negative numbers. The disproof of supply side economics is our current situation. Employers have plenty of supply of money, but they refuse to hire without demonstration of demand from consumers. Unemployed consumers, lacking money, cannot make that demand up from thin air. Magic does not work, in the real world of supply and demand, in economics.

Nota bene:  Videos come from a delightful series on economics created and put up on YouTube by Dr. Mary J. Glasson, licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.  Glasson’s series is available at YouTube and covers almost every topic in an entry-level survey undergraduate economics course.  Look for “mjmfoodie” at YouTube.com.

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2 Comments | 1929, 2012 Campaigns, 2012 Elections, Campaigns, Economics, Elections, Great Depression, Politics | Tagged: , , , , , , , , , | Permalink
Posted by Ed Darrell

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