The Phony Quest for More Jobs--A Prediction: Obama will Just Create and Transfer Debt for Jobs Funding.

 Update 12.08.09: President Obama unveils jobs plan, no price tag http://www.politico.com/news/stories/1209/30347.html

 “We are all Keynesians now” was a quote[1] from the past in my Econ 101 book by Paul Samuelson in early 1970. The origin of this was probably Richard Nixon who may have misunderstood Milton Friedman’s comment in Time in 1966. The quote is partially a lament in that some switch from a free market economy to one in which the government had more control is mandated and was considered not to be the best option. Keynesianism is basically a criticism of any feature of a given western economy where the business people, far outside and away from government controls,  make decisions in the economy using free market operations and this capitalism fails to supply a satisfactory solution to some element of the economy. [2] Marxist economies are never criticized by Keynesians. When any element of the free market fails to meet expectations then the government may, by the License of Keynes, step in and ‘correct’ that problem with fiscal and monetary policies. Conversely, many socialist or Marxist economies of the command-and-control sort fail miserably, crumble in debt and inflation, and recover only from entrepreneurism [read capitalism]—the very antithesis of Keynes. Such examples are the shrunken remains of the USSR and most parts of Eastern Europe and of course the People’s Republic of China. As such we can nosily abuse the old pendulum cliché and accuse the parties of having learned nothing from the past as we swing into socialism or worse as is our fate.

There is always the manufactured fear that the economy will fall into the clutches of Laissez-faire [“hands off”] economics[3] where corporations have too much freedom from government and gobble up the wealth. Presumably, the ‘government’ can adjust the economic factors and ‘control’ business and generate an egalitarian society that benefits all. The quest for ‘equality’[4] becomes the basis for new government programs that attempt to control business and redistribute the wealth when it swings out of balance. This is featured in the currently failing California Model [5][6][7] which will soon show us a few new and exciting adventures in defaults and failed government. This nostrum that government can step in and ‘fix’ things al la FDR never happens, but is a good political vector to pursue and those with little or nothing will always be attracted to some persons or theory if they are promised money.

If this problem was solidly circumscribed solely by the elements of the economies in question then we might strike some reasonable balance among the two approaches and avoid an oscillatory set of reflexive measures that bounce off the extremes. We cannot do this because of politics. The economic world exists only in an ensemble of economic pyramids with only a few who can manage to generate wealth thus producing a ladder system where people are necessarily unequal. This is unacceptable to the left. They believe in such nostrums as affirmative action where just about anybody can run a corporation or perform intricate brain surgery. They deny the facts as outlined in the Bell Curve[8][9][10] and insist that there is no distribution of cognitive skills and we must be equal. We, thusly, cannot trust our politicians, as history clearly shows us, with the care and feeding of any economy less they destroy it in the quest for power based on greed or some ideology with the phony excuse that they will provide equality.

Socialists like Bernard Shaw [Shavianism][11] had argued for forced equality using government policies whereby they would accept and implement his Fabianism.[12] He monotonously postulated that incomes should be equal. Shaw could not produce a scenario by which this might occur after repeated requests but he did praise the Bolsheviks for their attempts in this area. Of course, the Soviets distributed the loot from their plunder after murdering millions according to party membership thus providing a very good life for the top tier of the 4% of the Russian population who were party members and the rest were left with a much smaller portion or to starve.  The Ukrainians were summarily starved. Strangely, the typical leftist can celebrate and praise a flamboyant dictator like Castro who impoverishes their own country and produces poverty, war and famine as long as the money the dictator squanders was derived from the rich or from nationalizing corporate capital. Food was the issue in the Ukraine in the 30s as elsewhere and the Soviet solution was Holodomor (Ukrainian: ????????? translation: death by starvation).^[13] The left can seemingly stand up and offer to support the ‘poor’ even though they preach these lies from atop a pile of 100,000,000 dead bodies.

 So, we face a new Obama mandate to ‘create jobs’ in the Keynesian or Roosevelt cases, as appropriate, and business must submit to some new pressures or shut down or leave this hostile environment for capitalism. The phony ‘stimulus’ programs of the last year with its non existent ‘shovel ready’ jobs and infrastructure refurbishments were a failure and a joke. The reporting of jobs on recovery.gov gives us a hint of how this administration handles jobs, facts and reports the truth.[14] Our major problem in this economy was the wild and unrestrained use of credit that allowed people with no creditworthiness to ‘buy’ homes with nothing down mandated by leftist political pressure groups and the government as in the ‘affordable housing’ laws, a Neo-Marxian solution called the CRA [Community Reinvestment Act].[15][16] The original purpose of this socialist scheme was to redistribute the wealth without equally distributing the cost. Thus, the low class was offered wealth in terms of ‘affordable housing’ with no responsibilities at all to repay its debts and only their future votes were desired as payment. The credit defaults come from the low class, mostly Democrats and criminals. We lost 10 trillion dollars in wealth in that scheme. We are going to lose more as Fannie Mae and Freddie Mac are insolvent.

Our current Neo-Marxist government now blends fascism[17][18][19] with socialism in an attempt to redistribute the wealth as we saw in the GM and Chrysler bailouts where bond holders and stock holders were wipe out and the remains given to the unions while the management was replaced by orders from the White House. This is the only way they know how to play the economic game: Grunt and Grab. The Obama administration sees only wealth transfers[20] as the way to ‘create’ jobs and that is what they will use. They will recycle TARP monies and print more money and find ways to tax and intimidate businesses into hiring more people thus making them inefficient. This comes at a time when business has barely adjusted to the credit crunches and cut costs and found ways to be profitable—an insult to the left almost as comparable to the growth we saw during the Ronald Reagan Era.

So, Obama will:

[1] He will ‘create’ new jobs by taxing energy and health care by punishing all citizens using the phony pretext that we are saving the planet from destruction or providing care for all.

[2] He will announce that the government is the ‘employer of last resort’ [or a paraphrase of this nostrum] and use debt to pay for this. Our economy will collapse in massive debt.[21]

[3] Based on some phony deficit-neutral mantra, he will tax  everything in sight including businesses to manufacture phony jobs and expect the ‘rich’ to pay for all that with massive taxes of all sorts including confiscatory inheritance taxes and massive health care taxes. Business will shut down because of the extra costs and oppressive business climate.

All this will drive us further into debt and make the current 12 trillion dollar national debt look small by comparison. This is his only known option. He cannot or will not work with business in any other than the role of Commissar and continue to print money to cover the debt service.  The correct procedure here is to cut taxes for corporations and aid business and enhance the tax revenues from the salaries of new workers. This is called growth and is anathema to the left.

A lot of Americans are going to get some very expensive education about credit, government spending and taxation from Obama and they will not like it. But, they wanted ‘change’ and they are going to get just that.

rycK

Comments: ryckki@gmail.com