A Few Economic Notables...

• Liberal mistake: There needs to be a policy/program to alleviate every problem in the world.
• Conservative mistake: No vigilance against concentration of power in the private sector.
• "It's the economy, stupid."
• A measure of well-being: "Is my income smaller or greater than what it was last year?"
• The history of economic thought is strikingly similar to the history of women's fashion.
• Spending $0 on the Iraq War = 90 million kids getting health insurance
• When we buy manufactured goods at home, we get both the goods and the money.
• The natural effect of commerce is to lead to peace.
  

A Bad Estimate

HOTAIR - Many congressional Republicans, including members of the GOP leadership, have claimed that the plan to limit carbon emissions through cap and trade would cost the average household more than $3,100 per year. According to an MIT study, between 2015 and 2050 cap and trade would annually raise an average of $366 billion in revenues (divided by 117 million households equals $3,128 per household, the Republicans reckon).

But on March 24, after interviewing one of the MIT professors who conducted the study on which the GOP relied to produce its estimate, the St. Petersburg Times fact-check unit, Politifact, declared the GOP figure of $3,100 per household was a “Pants on Fire” falsehood. The GOP claim is “just wrong,” MIT professor John Reilly told Politifact. “It’s wrong in so many ways it’s hard to begin.” …

During a lengthy email exchange last week with THE WEEKLY STANDARD, MIT professor John Reilly admitted that his original estimate of cap and trade’s cost was inaccurate. The annual cost would be “$800 per household”, he wrote. “I made a boneheaded mistake in an excel spread sheet. I have sent a new letter to Republicans correcting my error (and to others).”

Wrong! Wrong! Wrong!

30%: Gov't Should Limit Celebrity Pay

While a great deal of public anger is focused at corporate executives these days, Johnny Depp and the Boys of Summer don’t fare much better. Thirty percent (30%) of Americans believe the government should make it illegal to pay movie stars and athletes more than $1 million per year.

A new Rasmussen Reports national telephone survey found that 59% oppose government pay limits for film stars and jocks.

There is a more support—but not much more--for capping the pay of corporate executives. Thirty-six percent (36%) say the federal government should make it illegal to pay any executive more than $1 million a year. The majority (54%), however, disagree. - Rasmussen Reports

Limiting economic freedom. Ahhhh!!!!

Howard Zinn's Philosophy

Just for you Jack

Chomsky on Adam Smith

"I didn't do any research at all on Smith. I just read him. There's no research. Just read it. He's pre-capitalist, a figure of the Enlightenment. What we would call capitalism he despised. People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn people into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits.

He did give an argument for markets, but the argument was that under conditions of perfect liberty, markets will lead to perfect equality. That's the argument for them, because he thought that equality of condition (not just opportunity) is what you should be aiming at. It goes on and on. He gave a devastating critique of what we would call North-South policies. He was talking about England and India. He bitterly condemned the British experiments they were carrying out which were devastating India.

He also made remarks which ought to be truisms about the way states work. He pointed out that its totally senseless to talk about a nation and what we would nowadays call "national interests." He simply observed in passing, because it's so obvious, that in England, which is what he's discussing -- and it was the most democratic society of the day -- the principal architects of policy are the "merchants and manufacturers," and they make certain that their own interests are, in his words, "most peculiarly attended to," no matter what the effect on others, including the people of England who, he argued, suffered from their policies. He didn't have the data to prove it at the time, but he was probably right.

This truism was, a century later, called class analysis, but you don't have to go to Marx to find it. It's very explicit in Adam Smith. It's so obvious that any ten-year-old can see it. So he didn't make a big point of it. He just mentioned it. But that's correct. If you read through his work, he's intelligent. He's a person who was from the Enlightenment. His driving motives were the assumption that people were guided by sympathy and feelings of solidarity and the need for control of their own work, much like other Enlightenment and early Romantic thinkers. He's part of that period, the Scottish Enlightenment.

The version of him that's given today is just ridiculous. But I didn't have to any research to find this out. All you have to do is read. If you're literate, you'll find it out. I did do a little research in the way it's treated, and that's interesting. For example, the University of Chicago, the great bastion of free market economics, etc., etc., published a bicentennial edition of the hero, a scholarly edition with all the footnotes and the introduction by a Nobel Prize winner, George Stigler, a huge index, a real scholarly edition. That's the one I used. It's the best edition. The scholarly framework was very interesting, including Stigler's introduction. It's likely he never opened The Wealth of Nations. Just about everything he said about the book was completely false. I went through a bunch of examples in writing about it, in Year 501 and elsewhere.

But even more interesting in some ways was the index. Adam Smith is very well known for his advocacy of division of labor. Take a look at "division of labor" in the index and there are lots and lots of things listed. But there's one missing, namely his denunciation of division of labor, the one I just cited. That's somehow missing from the index. It goes on like this. I wouldn't call this research because it's ten minutes' work, but if you look at the scholarship, then it's interesting.

I want to be clear about this. There is good Smith scholarship. If you look at the serious Smith scholarship, nothing I'm saying is any surprise to anyone. How could it be? You open the book and you read it and it's staring you right in the face. On the other hand if you look at the myth of Adam Smith, which is the only one we get, the discrepancy between that and the reality is enormous," Noam Chomsky, Class Warfare.

I'll have to read some Smith to find out on my own, but this is definitely intriguing.

Who won the first debate?

MILITARISM WON!

This is a bit late I know. Vote Nader/Gonzalez!

Nader/Gonzalez 08'

Ralph Nader on the passage of the bailout.

Zack Interviews Noam Part II

Zack interviews Noam Part I

It's funny how this completely contradicts the article on NAFTA we read about today in Business.

Poverty Increases In Concentrated Areas

New York - One less visible aspect of the economic boom of the 1990s was a decline in the number of low-income working people who lived in very poor neighborhoods.

But that trend has reversed during the first five years of this decade, according to a new analysis by the Brookings Institution, a nonpartisan think tank in Washington. It found that the number of poor people who live in areas of concentrated poverty increased by 41 percent since 1999.

"Many of these neighborhoods that made these great gains in the 1990s – with the downturn in the beginning of this decade and the weak recovery – have been hit hard by this economic change," says Elizabeth Kneebone, lead author of the report and a senior research analyst at Brookings' Metropolitan Policy Program. "We've lost a lot of ground and see poverty again increasing in these neighborhoods." - Christian Science Monitor

Trickle-down economics summed up: the rich get richer and the poor get...wait for it...richer. Did I let you down? We need trickle-down again. But really, in times like these how can one expect the poor to flock to the suburbs?

Naomi Klein: The New Chomsky

This video is a trailer for Klein's economic commentary The Shock Doctrine.

Noam Chomsky On Capitalism

CHOMSKY: This is mostly propaganda, in my opinion. What is called 'capitalism' is basically a system of corporate mercantilism, with huge and largely unaccountable private tyrannies exercising vast control over the economy, political systems, and social and cultural life, operating in close co-operation with powerful states that intervene massively in the domestic economy and international society. That is dramatically true of the United States, contrary to much illusion. The rich and privileged are no more willing to face market discipline than they have been in the past, though they consider it just fine for the general population. Merely to cite a few illustrations, the Reagan administration, which revelled in free market rhetoric, also boasted to the business community that it was the most protectionist in post-war US history - actually more than all others combined. Newt Gingrich, who leads the current crusade, represents a superrich district that receives more federal subsidies than any other suburban region in the country, outside of the federal system itself. The 'conservatives' who are calling for an end to school lunches for hungry children are also demanding an increase in the budget for the Pentagon, which was established in the late 1940s in its current form because - as the business press was kind enough to tell us - high tech industry cannot survive in a pure, competitive, unsubsidized, 'free enterprise' economy, and the government must be its saviour. Without the saviour, Gingrich's constituents would be poor working people (if they were lucky). There would be no computers, electronics generally, aviation industry, metallurgy, automation, etc., etc., right down the list. Anarchists, of all people, should not be taken in by these traditional frauds.

More than ever, libertarian socialist ideas are relevant, and the population is very much open to them. Despite a huge mass of corporate propaganda, outside of educated circles, people still maintain pretty much their traditional attitudes. In the US, for example, more than 80% of the population regard the economic system as inherently unfair and the political system as a fraud, which serves the special interests, not the people. Overwhelming majorities think working people have too little voice in public affairs (the same is true in England), that the government has the responsibility of assisting people in need, that spending for education and health should take precedence over budget-cutting and tax cuts, that the current Republican proposals that are sailing through Congress benefit the rich and harm the general population, and so on. Intellectuals may tell a different story, but it's not all that difficult to find out the facts. - http://www.struggle.ws/rbr/noamrbr2.html

Once again, Noam hits the nail on the head!

EU Lifts Cuban Sanctions

BRUSSELS (AP) — The European Union on Thursday agreed to lift its diplomatic sanctions against Cuba, but imposed tough conditions on the communist island to maintain sanction-free relations, officials said.

The U.S., which has maintained a decades-long trade embargo against Cuba, criticized the move, saying there were no significant signs the communist island was easing a dictatorship.

EU External Relations Commissioner Benita Ferrero-Waldner said the bloc felt it had to encourage changes in Cuba after Raul Castro took over as the head of the country's government from his ailing brother Fidel.

"There will be very clear language also on what the Cubans still have to do ... releasing prisoners, really working on human rights questions," she told reporters at an EU summit. "There will be a sort of review to see whether indeed something will have happened." - USA Today

This Guy Should Be President! Ron Paul

Ron Paul (who is more interesting than Noam Chomsky) lectures on economics:

Bush's Rebate Plan

Washington - Amid skyrocketing energy prices and a nationwide housing slump, President Bush is calling for an emergency plan to stimulate the economy.

The president said his economic plan is big enough to make a difference. It includes $145 billion in tax relief and other incentives, all aimed at getting people to keep spending and businesses to keep hiring.

Under Bush's proposed plan, taxpayers would get rebate checks, money directly from the government. Individuals could receive up to $800 and married couples could see up to $1,600.

"Americans could use this money as they see fit, help meet their monthly bills, cover higher costs at the gas pump or pay for other basic necessities," said Bush. - WTHR

Is this a good idea?

Think This: January 7, 2007

Mike Huckabee's stunning victory in Thursday's Iowa caucuses does more than change the GOP nomination race. With a platform explicitly grounded in his Christian faith and a populist economic message, Mr. Huckabee offers the Republican Party a new political narrative, light years removed from the limited government principles governing the GOP in the Reagan and post-Reagan era.

This pro-faith, pro-government message may sound strange to American ears--but it is a staple of conservative political parties on the European continent. Mr. Huckabee, in other words, essentially gives Republicans a choice: Does the GOP want to become a Christian Democratic party? To answer that question, Republicans should look carefully at Christian Democracy to see if it is a model worth emulating.

Is a faith-based, pro-government party necessary for political success?

Christian Democracy is a reaction to the classical liberalism and socialism that came of age in late 19th century Europe. Both of these movements threatened the faithful with their secularism and economic theories. Classical liberal emphasis on unfettered markets evoked fears of untrammeled greed and exploitation of workers; socialism made many fear for the future of private property.

...These parties uphold marriage and the traditional family as the bedrocks of society. They also advocate economic policies typified by the CDU's ideal of a "social market economy," which emphasizes the need for both government-provided welfare and capitalism. Contemporary Christian Democratic parties are also some of the staunchest supporters of rapid reduction of greenhouse gas emissions. They reach this conclusion from the principle of "Christian stewardship," which the Norwegian Christian Democrats say "implies that the resources of the Earth should be taken care of for the best of present and future generations." - American Enterprise Institute

Christian Democracy is a best of all worlds kind of party as it combines elements of socialism, capitalism, and environmentalism.

On a side note, it looks like Think This will be returning after a three month hiatus.