Category: Economics

Jon Stewart did such a superb job nullifying Cramer that the Huffington Post dedicated a front page story to it. Of course, the Huffington Post does not hide her commitment to pure socialism. But there is a strong case against Cramer. He brought in CEO’s who were uttering non-sense for a long time and still, Cramer gave them a blank check. Result: Journalism without accountability.

Cramer’s actions deserve strong rebuke, even if from a comedian’s mouth. But Cramer took it like a man. He admitted his faults and even sounded like he repented for some of his past wrongs. Let’s see if this bears any fruit.

Jeffrey Tucker celebrates:

House rejects the bill. A magnificent repudiation of the Fed, the Treasury, Bush, Wall Street welfarists, inflationists, and stabilizers of all sorts. The costs of what the Fed has already done are going to be massive and felt for many years. But at least Congress has so far, and this time, not participated in the evil.

It’s a great birthday gift for Ludwig von Mises.

Henry Hazlitt is superb in his analysis of economics. What he wrote 50 years ago is still a vivid reminder that greedy politicians live to demagogue. These agents of self interest appear to solve the economic dilemmas of our time as the deus ex machina. They are convinced that their bailouts and handouts will be sufficient to stimulate an economy that has been dying for decades. They take heed to economists who see only the short-term effects of a policy. As Hazlitt summarizes:

This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups (Henry Hazlitt, Economics in One Lesson, pgs.15-16).

Most politicians are short-sighted because when they are elected they are already making plans to be re-elected. In light of that, they overlook what Hazlitt calls “secondary consequences” (16). They do not consider the long-term effects of their quick solutions. The only economic policy worth considering is the one that looks beyond present bubbles and financial stresses. Good economy needs to consider all possible consequences and its effects on all classes, not just one particular group.

As an example of this short-sightedness, the Congress and the White House passed a deal that would give each tax-payer a $600 tax rebate. The intention, of course, is to stimulate the economy and avoid a recession. They want immediate effects. But what the government wants is not usually in your best interest. Economist Gary North phrases the question thusly:

What is the best thing to do with your income tax refund, i.e., the return of your enforced, interest-free”loan” to the U.S. Treasury?

Among his suggestions are two that befit a long-term view of economics:

If you have any credit card debt, pay off principal. If you have no credit card debt, pay down some other
debt, other than your mortgage.

The government wants to stimulate the economy by encouraging consumers to spend, but a wise household will turn that around and use that money to invest or to pay debt. The government of your own home takes precedence over the selfish ambitions of politicians.

In these last few years the shape of American politics has been overwhelmed with economic naiveté. Christians have been largely unresponsive to politicians who have economic awareness, but strongly favoring Christians who are socially conservative. This dichotomy is incomprehensible. The answer to this bizarre distinction stems from a lack of economic knowledge. This lack of knowledge pervades the evangelical world which thinks that if a social conservative president is elect, then all things will fall into place. The reality is that political discourse cannot disconnect economy and morality. The late Dr. Ronald Nash once wrote:

…if a Christian wishes to make pronouncements on complex social, economic and political issues, he also has a duty to become informed about those issues. [1]

If Christians are committed to a Biblical view of the world, then “Thou shalt not murder” and “Thou shalt not steal” will be treated with equal importance. Christians cannot fight for the right of the unborn while despising the right to economic liberty. If abortion is eliminated and economic tyranny emerges, then we will have lost this battle.