BIG X ECONOMY: AN ESSAY
Edward E. Rochon
Edward E. Rochon on Shakespir
Big X Economy: An Essay
Copyright © 2017 by Edward E. Rochon
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Some Other Works by the Author
[Compound Interest: An Essay
Contra Ricardo: An Essay
Dollar Inflation: An Essay
Dollar Inflation II: An Essay
Green Gold: An Essay
Inflation Court: An Essay
Jobmasters: An Essay
Minimum Wage & Economics: Essays
Monetary Stability: An Essay
[Global Warming: An Essay
Pest Control: An Essay
Pollution Solution: An Essay
Pollution Soup Cook: An Essay
Table of Contents
Is laissez-faire economy truly a perpetual motion machine as classical economists suggested some two and a half centuries ago? Excess supply will produce demand and full employment. Say’s Law is the perpetual motion machine? Two and a half centuries indicate it is not, just as you might also expect with mechanical perpetual motion machines devised and marketed through the ages. Well, maybe in the long run it all works out. In the long run we are all dead was the Keynesian retort. People need income or trouble raises its ugly head, pessimism leads to hoarding, reluctance to invest or produce in uncertain times.
Speaking of John Maynard Keynes, who supposedly agreed with Say’s Law in general, what caused stagflation? How about monetary expansion being used to export jobs overseas? We have Socialism and Marxian theories swirling through the marketplace, though Socialism is on a bit of a downswing. We hear many Russians want to go back to the not so good old days, and nostalgia for Good Old Joe Stalin lingers. We might suppose Lev Trotsky would have made things worse for Russia, the big hero of the purity of the doctrine of the faith of faithlessness.
We have a general suggestion for national economies trying to keep production and employment up. We place another edge on Keynes by speaking of speculation, critique Smith, Marx and their crowd to see what flaws are in their views, repeated by others or not to whatever degree from past critiques of said economists.
Chapter 1: Pink Slip Blues
Yes, pink and blue often appear in the sky, the economic sky as well. Rosy fingered dawn rises from the darkness of hard times in the dawning of the bull market. Pink slip sunsets presage the bear market downturn. Is God telling us something? And then the storm clouds! Storms are really mean at night. No moon, full or not, no stars to guide us. Look at Hannibal Cannibal, his psyche warped by the poverty and distress attendant to WWII in Europe. The factories were booming where not being bombed. But Hannibal, the Red Dragon, simply went mean, cannibalistic and gloried in cruelty and malice. Look, how the seagulls steal from each other at the town dump, and even at the lovely beach. Ah, that is just fiction. Yes, but not the seagulls, and fiction speaks the truth quite often.
What have we to look at?
SURPLUS VALUE: Karl Marx says the profit motive demands cutting expenses to the bare bones by any means to increase market share and profits. Labor costs were his main concern. You cut wages whenever and however possible, and oppose any attempt to place a floor on how low wages drop or for worker agitation to increase them. One company’s attempt to corner more market share leads to retaliation against the workers’ wages elsewhere. Eventually, wages are so low, the impoverished masses cannot afford to buy what they produce. This creates a surplus of goods (value) that necessitates layoffs and curtailment in production. Then, the workers have no income at all, producing a spiraling downturn in sales. Ultimately, the workers must die or revolt. But you will have some boom and bust cycles in between that time, as companies go under, leading to cartels that use economies of scale to further reduce expenses, while driving out competition.
Are there any potential flaws in Surplus Value?
SURPLUS VALUE CRITIQUE: If wages go down to lower prices so that goods are more attractive to consumers for the purpose of creating greater market share, then workers need less wages to pay for the same things they bought at higher wages. It equals out? You must suppose that the basic goods the poor require go down proportionally with their wages. That is, unless yachts and caviar are cheaper but potatoes not as much or at all, then there will be problems for the poor and potato farmers and grocers. However, as the expensive yachts are built and assets flow out to purchase imported beluga caviar, the less money spent on surplus basic goods, means overproduction of these will be delayed and so also pink slips handed out thereby, at least to some degree. We must always remember that in the social sciences and hard sciences as well, the world is filled with a sea of sine waves clashing and mixing. The aggregate of these sine waves is the resultant reality. Finding the causes of this reality by summing the average of these sine waves can be a bitch, the nauseating world of empirical science. Barf, mal de mer!
You might also ask why employers might not avoid a potentially nasty price war, keep output proportionally the same, and reap more profits on the same goods sold after expenses decrease? Moreover, there would still be the option of using profits to upgrade facilities for a bull market, where the market share stays the same, but the absolute value of products sold by that industry increases. If workers might conspire to set wages, employers aspire to set prices while cutting wages. You still get more profits and avoid trade war.
Hey, but that is not sporting. All fat cats are jocks. Win, win, win is all they think about. They are football players with Brit hooligan firms to play rough during and after the game. Adam Smith opined that history showed that this was not necessarily true. Hey, those were the dark ages before the enlightenment of Soccer Philosophy! Well, in the end, business is about business and not sports for the sake of sports, competition for the sake of competition.
OK, but if they increased profits while cutting wages, the workers are really screwed. Yes, but production is not increased, creating less surplus value from cutthroat expansion of market share. You cannot increase market share unless production goes up. You must keep workers employed and even hire more workers to increase market share through increased production. What else can you do with those big increases in profits derived from increasing the gap between expenses and sale price? You can invest in new industries, increase production that creates a bull market from high profits. Stock markets love high profit margins. The shareholders are ecstatic. This is what a bull market is. New ventures means jobs in construction, putting upward pressure on the labor market and labor wages, recouping some wages from cuts in expenses to increase profit share. If the fat cats and shareholders build new houses and sell off old houses, we have more jobs for construction workers, and more sold off old housing sold for lower prices to the middle class. The Real Estate market is bullish. If they build summer houses, more work for labor still.
Moreover, as technology improves, the relative value of labor costs generally decrease as a proportion of expenses, though high tech jobs can demand higher wages in counterpoint. Wisdom not labor is the critical factor in making the human race healthier, wealthier and wiser. Herr Marx certainly has flaws in his proposition, even assuming no intervention from trade unions and government legislation to keep wages up.
SAY’S LAW: In addition to lags in production turnaround, changes in demand due to changes in taste, politics, war, innovation that might make unloading surplus goods difficult, we have speculation to deal with. Before considering that, look at turnaround problems. The town factory has a glut of its wares due to a slump in demand for any of the above reasons. The owner has cash flow problems to some extent. He lays off workers to cut costs, may have to sell assets and even go out of business. Moving out of town to get employment elsewhere has lead time and financial problems and personal decisions to ponder over life goals, all this taking time to pick options, etc. The owner might liquidate assets and build new lines for new products, or use the downturn to upgrade plant facilities during the lull by drawing down his assets as a venture option on new profits. He could borrow on the same venture option motive. What skills do the factory workers have for this? Surely, not all have what is required or even many of them. We have unemployment. If systemic changes in demand such as politics and war are in play, the unemployment may be systemic. You might have impressment into the armed forces to take up the slack, not very productive in the ideal for prosperity. And the large armies require production with fewer workers at home to do it. The dead do not need to be reemployed. These things have been noted before.
What about speculation? If you are venturing to make money on it, price fluctuations are mandatory. These are invariably in some way parallel to fluctuations in supply and demand. You could lose your shirt if you miscalculate. But you look for inside track information, conspire to fix the game when possible with other speculators. You restrict supply, pull it off the market, to drive up prices even in a bearish market when feasible. Increased demand building up over time, increases the value of your supply. You decide when to sell to maximize return.
Everyone speculates to some degree in most cases. You want to sell your house and buy a condo in Florida for your retirement. Those New York winters are killing you, bleeding you. But the market is low. You pull your house off the market and suffer Jack Frost for another winter or two, read the market reports, wait for the housing market to pick up and the prices with it. A capitalist may pull supply off the market in overt or tacit agreement with other suppliers. Don’t sell cheap. Wait for the price to rise. Pulling supply must increase demand by default to some degree. Can I afford it? How perishable is my product? Will it go out of fashion, become obsolete? Do I own my own warehouses? And then you have the notorious hoarders of precious metals, and other commodities who have bought cheap to sell dear later. Will the government intervene? Did they overestimate the cost of cornering the market, making returns less than expected? What if a new gold strike pops up? Could they lose their shirt? Speculators can win big or lose big.
Now we begin to see another reason why Say’s Law does not work well or at all. The great piston of wealth generation must push and pull according to supply and demand. But in hard times buyers want to depress prices by lessening demand. Sellers want to increase prices by restricting supply to some degree, to the extent they can profit by it, afford to hold out. The buyers are invariably the poor and lower income people. Industry can also cut back to lower demand, it is true, the wealthy owners of supply. Sellers, employers, the rich tend to restrict supply if possible. No one wants to sell at a loss if avoidable. You do have forces acting to force sale at a loss to prevent losses due to warehousing costs, perishable item losses, inability to pay debts due to liquidity shortfalls, the need to pay bills for vital resources.
Who is best able to hold out here? It is the sellers (generally the wealthy and the more wealthy) rather than the buyers (generally the poor and modest income folks, and the less wealthy industries.)
The restriction of supply on one end of the piston of industry, and the restricting of demand on the other end acts to slow the piston down and the generation of wealth. Engine exhaust is impeded in sating demand. Combustion is impeded by restricting supply through hoarding and factory shutdowns, services industry slowdowns, and shutdowns. You see the problem with Say’s Law here in the short run. In the long run we are all dead. If the poor die of starvation, poor health, the children not killed but maimed for life by malnutrition in the future, we have loss of life and of potential production.
We can see that this speculation rule is about as much a law as the law of supply and demand for hard times.
There is another matter, that of taxation and who pays in good times and bad. The producer always tries to pass off any taxes incurred by his business, and revenue losses from that, to the consumer. He does this to the extent that the elasticity of demand allows. If demand is very responsive to increases in prices, he may be stymied in this to that degree. The worker has some say over what he will work for but very little. He has not the savings of the rich to hold out for higher wages. Unions generally are corrupt and corrupted. It is full employment that is the best friend of workers, not unions. The eight hour work day was set by fiat. The unions were not necessarily needed for this. Popular demand could have made it happen. Unemployment insurance is more effective than union handouts. Government safety rules are more effective than union rules in the end. Unions can use these rules and laws to coerce employers by legal mandate more effectively than by arbitration agreements. A prince of honor can tolerate nothing that interferes with his military machine. An honorable prince will not tolerate unemployment. It weakens his military machine, makes him unpopular and allows conspirators against him to use these to destroy him, by collaborating with enemies, sowing discord among the dispossessed. Bread and circus, the dole, etc. are the tools of oligarchs and Caesars, contemptible victims to the coups of oligarchy that toss them in and out of power. No man can be Caesar, but an honorable prince will be sustained by honorable dukes, lieutenants and the people who detest the evil cabal of courtiers and legislators who lurk in the dark, oppress the people. The duke prefers his own territory, mindful that undermining the prince undermines his own real power over his lieutenants. He is a soldier and not a vile courtier, prostituting his wife, corrupting the king and queen with flattery, sybaritic lifestyles, fornication, prostitution, wine, drugs slipped into the wine, and poison when all else fails. What prince trusts such people? None, but fools only, those not worth the name of prince.
As a final nail in the coffin of the perpetual motion machine economy, economics does not work. It has never worked and never will work. Are things produced? Only despite economic trouble and accusations. Only wealth generation works. This comes from wisdom and doing what God told man to do. Subdue nature and make it a paradise, using your own efforts with God’s help, only if you help yourself. If you will not lift a finger for your own salvation, are not your prayers and complaints mockery of God and hypocrisy? It does not matter whether the reader believes in God or not, the fact is that the scenario is true. We create wealth by ruling over nature.
So we see that the forces of speculation upon supply and demand, the attempt to pass taxes off to the consumer, various other factors make Say’s Law no law at all. Neither Say nor Smith really believed in it in the absolute sense either, nor Ricardo. Now let us talk about the Big X economy and a flaw in Keynesian priming of the economy through money supply expansion.
Chapter 2: Big X
The central banks prime the economy by expanding the money supply. The government hands out subsidies to industry, to the poor, to foreigners who buy our goods with foreign aid money. The state is targeted priming, and the central bank un-targeted priming or general priming. The state may make mistakes in how it primes. The mistakes of the central banks are always cloaked but after the fact hints arise.
When the state screws up overtly, we can target the GAO and OMB for bad advice, the Congress and President for following it or initiating it, or even ignoring GAO and OMB criticism of the policy. Democracy should be transparent to work well. The central banks have control of the money supply, because it is claimed the temptation of government is too great to print money to pay for expenses. But what does this have to do with money priming without consideration of the target of priming?
For example, the taxpayer pays for this priming one way or another. We suppose the supply is increased. People borrow money to close down plants in America to go overseas. People borrow money to invest directly overseas, either to make money or to lose money. Lose money? Yes, it is known that you can get tax breaks by losing money offshore that are compensated for by the tax breaks. You earn more by cutting tax expenses than you lose in profits overseas. And you still have assets overseas outside of direct control of your own government. You can lose money and keep the assets because ultimately the American taxpayer is paying for this.
And how does this justify Congress paying for this by giving the Fed the power to do this? It does not. And it is completely occult. Is it illegal to invest overseas? Generally not in the US economy. And let us look at the consumer. He wanted to go to Vegas and gamble, watch girly shows, keep late night hours, listen to put down comedians. Apart from supplying income to the targeted recipients of his largess, how does gambling generate wealth, ruining one’s health by sybaritic lifestyles, so that you need a vacation from your vacation upon return from Vegas? Oh, and someone buys an impractical sports car at the expense of family functionality, and maximum saving of time and fuel for his personal economy. Why, does he do this? Lower interest rates tempt him into it. Why blame the Fed? Original sin is both personal and collective. The flaws of society are the flaws of the individuals in that society, and the individual flaws collectively the flaws of society. I don’t care if you think original sin is fair or not, or God exists or not; the fact is that original sin is operant in society for all to see. Taking an amoral view changes nothing. OK, we have fatalistic misfortune instead of original sin.
OK, you say, people will go to Vegas and spend money unwisely. Do we put them in financial prison? We make sure that our economy is producing goods that insure basic needs, national security and a bright viable future. Let the workers earn money doing this, then they can go on vacation to Vegas with their earnings, buy that sports car on their own. We do not want an easy car loan, or credits or questionable employment options to finance these. Let them spend their money; let us not be meddlesome. Yet, our economy is our business. How money expansion is spent is our business. And it does matter who owns what too. Milton Friedman cared not about assets going overseas to return buying up the country. But it does matter who owns what. It matters who you rent to. It matters who your landlord is. It matters. And bloated multinational bureaucracy has the inertia of all such huge conglomerates that detract from any marginal economy of scales. Include multinational government with that. Overcentralization is death to humanity. Division of labor is not a virtue but necessitated by human weakness. You will never be strong unless you heal your infirmities. Adam Smith did not have to work in those Dark Satanic Mills. Great states strive for versatile citizens, versatile industry. Wisdom, not labor or specialization of labor is paramount in the end. Local independence is necessary for balanced government and this entails some control over production.
What to do about this? Any Fed priming must be channeled by state activity into truly productive priming of the economy. I mean, we advance the sciences, political organization, and turn these to improved production in wealth generation. This increases the tax base, cuts back on the need for subsidies for the destitute and to critical industries.
How do we do this? We set a base minimum wage for labor and make the commonwealth at large pay for the excess above what employers can afford. We keep cheating down by bounty hunters working with police to suppress cheating. There are problems to this, but if the result is industry getting away with free labor at government expense, so be it. Idle hands are the devil’s workshop. People not working is labor and production lost that pays for taxes to to pay for subsidies. Living wages eliminate or reduce need for food stamps, subsidized housing and healthcare. This gets Big Brother out of people’s lives.
Let us look at the right wing objections to minimum wage. If the business is not paying for the increase, it does not increase their expenses in labor. Eliminate the: it inhibits investment argument through increased expenses for labor. The make work argument is void. The government pays all minimum or low end wages across the board. The state does not create jobs, nor make make work jobs. The small businessman, in particular makes the job decisions, along with big business. Are these people also incompetent to make productive work that is not make work? And remember, the state has an interest in keeping idle hands busy besides. Are not businessmen also citizens with an interest in curbing vice generated by poverty? And do not tell me that poverty does not have anything to do with vice due to the darkness of the human soul. It does contribute to it and there is plenty of evidence to support this. And are not employed people with resources less likely to demand socialization of private property? Yes. How about the objection to big government in general? In the first place, we already have it. Poverty among the poor is a prime incentive to support this. In the second place, regardless of what phony baloney evangelists and Sarah Palin claim, income redistribution is ordained by God. That is what the Jubilee is about, the seven year and fifty year version of debt relief. In the third place, the state is ordained by God. It is the nation that corrupts the state and not the state the nation. If corrupt people control the state, they will use the state to corrupt people.
Do Conservatives recall the adage: guns don’t kill people, people kill people? Well, government doesn’t corrupt people, people corrupt government and the people both through and outside of government. Screw your big gov’ment crap. Private property does not make people honest. Government employment does not make an employee corrupt. If his supervisor is corrupt and tempts him to corruption, what about the boss in private industry who tempts his employee to cover up and abet corruption? One standard for all, Conservative. What is good for the goose is good for the gander, and what is fair is fair for both.
But this is beside the point, and prefatory for Big X policy. What is Big X? You have the standard business chart. There is a line sloping down that shows how much profit industry makes on variable cost of producing widgets (overhead taken into account as fixed cost.). There is a line sloping up indicating the number of widgets produced and the rising pressure on costs associated with this. Where the lines cross is the maximum profit for the company. The company will not make profits on production beyond that point unless they improve productivity or reduce expenses (by cutting wages, for example.) General Motors has one of these. The auto industry as a whole has a composite one of these. Does Uncle Sam have one? We should think so. Is it at variance with the industry Big X? We think it often is, if not always.
Why would they vary? We have a man who wants a second job at low wages but has no car or an unreliable car. He worries car expenses and possible breakdowns will lose him the job, and suck up his earnings in the end. He has trouble paying for gas. His wife would like to shop for bargains at a mall down the highway, but fears breaking down on the road. This family could earn money and save money with a reliable car, maybe. GM cannot produce cars at a price to encourage sales that lower income people may want. You have demand for new cars but not the money to buy them. New sales increases the used car market and the quality of the used cars and supply. The poor aforementioned family is now able to buy a reliable used car with less fear of financial ruin. Lower risks increases investment among the poor too.
Now Conservatives want to get away from the dole economy. Honest liberals should not object providing the poor can get by. Only the dedicated Commies want to incite revolution. Did you ever notice that every time the poor apply for something, they do so on pain of perjury? How many times do subsidies to the rich and corporations end in perjury? They may perjure themselves during inquests, but usually huge sums are wasted without much consequences. The CEO’s get golden parachute drops as the company crashes. I have been a government auditor. Screw audits. I want a book of statements on pain of perjury to be signed by CEO’s, CFO’s, VP’s, foremen, executive secretaries (often female employees. You would be better getting the CEO wife to sign one and the main maid at home. But they are not employees, though insiders, and cannot be legally justified.) When things go wrong, pull out the on pain of perjury testament about current assets, tax returns, production costs, etc. Did you know that it is very difficult to hide malfeasance through bad luck, even bad decisions, even criminal negligence when perjury proves you are culpable of lying to the state, stockholders, all along? Forget about perjury on testimony after the fact. Bring them up on perjury before the trial starts.
If a man wants higher return on investment, and hands over assets to people to handle things he does not know about, try and get as many perjury documents signed by the money manager as possible. Get him to lie on tax documentation, lie on assets of any sort. Get a lawyer to figure out how to force him to perjure himself as often as possible. The stock market can be a mystery, but everyone understands perjury. Prove perjury, and you prove grand theft in most cases. Prove multiple counts of perjury, and bribing judges and jury tampering becomes much more difficult to get away with.
Getting back to Big X. The US tells GM it wants more cars produced to meet true demand. It gives GM a subsidy that allows GM to produce more cars and still make a profit. It raises the profit downsloping line so that it falls further along the quantity of cars produced line. This is hard subsidy for a specific purpose in a core industry that primes the economy. If the government screws up, it guarantees to buy the excess cars. However, the auto makers still produce cars as required by demand. Unfortunately, we still do not have 48 hour turnaround on car orders. Industry has to consider lead time, inventory on hand based on sales assumptions. So, the priming may lead to Uncle Sam getting stuck with excess cars.
If the increase of cars on the road increases gas prices to those with cars but little discretionary income, the US stretches the gasoline and diesel fuel production chart lines by the same method to keep cost down there. You do this for only the big prime industries: auto, energy, metallurgy, computers. This is done in the open, by the Congress and President upon input from the GAO and OMB and private industry and the press. Of course, just as private industry can screw up in judging market demand, so can Uncle Sam. Practice makes perfect. Humiliated Congressmen and Presidents shit on the GAO and OMB and insult business associations and press pundits until we get precise control of the economy. We want an economy as efficiently shifting gears as Jackie Stewart shifts his race cars. Forget about Adam Smith, David Ricardo and the perpetual motion crowd.
Let us look at corruption. Cities and states subsidize industry only to be screwed by corporations moving offshore or out of town. What if GM takes the money but does not produce the cars or passes out shoddy cars? OK. Look what they have to do. They must hide hard production malfeasance. The vendors must be bribed. They will be pissed if the increased parts orders primed by Uncle Sam do not arrive. The auto sales franchisers will be pissed off if increased sales do not come in or are stymied by patently defective cars. They must be bribed. The union employees working in plant are pissed off because they are not getting overtime, and resent the fat cats ripping off the American people (themselves.) The union bosses may resent no hiring that would increase union membership and dues. The unions must be bribed, the employees somehow shut up or intimidated. Hard to do with so many thousands involved.
What do you suppose GM management might say? To hell with this ripoff, let us just make the cars. And what if Ford produces and puts out quality cars equal to prior years? They get market share. We might be caught with dirty hands too. We are going to jail though we bribe the Supreme Court. This is grand theft and perjury. We cannot pull this scam off. The best intelligence a prince can have is to provide great incentive for many factions of society to rat out evildoers out of self-interest.
This targeted Big X policy is better than central bank priming for national economies. If GM buys parts overseas, the country can live with that as long as the industry that is here stays here and workers derive benefits and all pay taxes back to the state to pay for subsidies with a bonus of continuous production. But we must produce wisely in investing in energy, technology, and the rest. There is no substitute for wise investment. You will have arguments. Spend it on buses, motorized rickshaws, motor scooters. We have too many cars, etc.
Chapter 3: Daft Donald
But what if we screw up, and Uncle Sam gets stuck with a large inventory of cars? OK, with the current administration in mind:
DD: Daft Donald here with the absolutely lowest and best prices in history. You heard of Crazy Eddie maybe, and his insanely low prices for his Washington Birthday Sale? Daft Donald matches Crazy Eddie and then some. You don’t believe? Listen to my mother-in-law. Come on over, ma (Ma enters.) Ma, thanks for helping out, showing that Daft Donald’s mother-in-law has community spirit.
MA: You’re welcome, Donald. It is the least I can do for the American people who did me the honor of electing my son-in-law to the highest office in the land.
DD: Take a look at these prices, ma. What do you say to these?
MA: Why, Donald, these prices are daft, just daft. Whoever heard of such sales?
DD: That’s right, ma. Thanks for your help. You want more proof, people? Ivanka, come on up.
IVANKA: Hi, dad.
DD: Honey, you have business sense and know a good deal when you see one. Look at these prices that White House Auto Sales is offering the American people. Tell me what you think?
IVANKA: Why, dad, these are daft, just daft. You know, Jared and I were recently checking out car prices, and noticed the lower end prices as well. These deals are just rock bottom. Dad, people are going to stop comparing you to that grumpy Donald Duck, and start comparing you to Daffy Duck. All I can say, dad, that if you keep offering these low prices, duck and cover, if you know what I mean, duck and cover.
DD: Duck and cover, honey? You know you are talking to the General Patton of the White House. Daft Donald does not duck and cover. Let ‘em call me daffy; let ‘em call my word, taffy, candy lies that stretch like a Bonomo Turkish Taffy candy bar. My word will stick to your teeth like taffy. My word ain’t no teeth rotting BS. This ain’t no junk food junk car deal.
IVANKA: But there’s so many cars, dad. The White House front lawn is jammed with them. How can you handle that and run the country?
DD: Not just me, Ivanka. I talked the Supreme Court into offering free cars for the best legal briefs. Time is money. Just the other day the Heritage Foundation chief counsel won a free Lincoln Continental on a 5 to 3 vote with one abstention, Justice Ginsburg writing a dissenting opinion. She noted that while the brief was pithy and without spelling errors, she found it to be vapid, and filled with neo-conservative platitudes. Vapid, vapid? Do you believe that, honey, vapid.
IVANKA: Why, dad, it is hard to believe that a woman in her exalted position could stoop to such vituperative language. I am utterly shocked and dumbfounded.
DD: Well, let me tell you, Ivanka, the chief counsel for the Heritage Foundation is riding home to Louisiana with a brand new Lincoln, and he ain’t worrying about vapidity, I can tell you that. Now that Congress knows the Supreme Court is pitching in, we are going to start up Capitol Hill Auto Sales. I’ve got the Speaker on board. We will sell cars displayed at the rotunda, outside, in the Library of Congress. Some of those pols are real pitchmen, I can tell you that, taking turns on sales.
IVANKA: Wow, and I’ll bet you can keep this pricing for a limited time only. Not even crazy Eddie could push these prices much beyond Washington’s Birthday.
DD: You think? You think Crazy Eddie outdoes your daffy dad? Let me tell you, people, White House Auto Sales here in the very city dedicated to George Washington is Washington’s Birthday 365 days a year. Everyday is Washington’s Birthday here at White House Auto Sales. None of that high pressure get it while they last. When and if the last car is sold, I will tell you and not one car before. These prices hold till end of clearance. I must move on to the country’s business. Every deal for an American is a deal for Daft Donald, for his mother-in-law, his children, for the population of the Isle of Lewis, my ma’s home island, the country famous for frugality and thriftiness. And my son-in-law is Jewish too, your husband, Ivanka. You know their reputation for penny pinching.
IVANKA: That’s right, dad. And, you know, even though our car pool couple have an uncle that was in the SS, we still take that gas money.
DD: Your riders are Nazis?
IVANKA: No, the wife is half Jewish too.
DD: She’s half Jewish and her uncle is SS?
IVANKA: It happens
DD: OK, Ivanka, love that charitable spirit. Come on down folks and get a warm welcome from your President. See you soon.
OK, essays are on the dull side. Poor taste? People say the Trumps are in poor taste, period. The business of government is business. Simply making a point with a bit of glibness. Irony and puns are the glory of God. Who cares if they are corny? Nothing is really funny anyway. Tha’ tha’ that’s all folks!
Well, not quite. To recap, the laid off worker now only buys one snowcone every week instead of ten. This drives down demand and prices. Bob’s Snowcone does not like the prices. He shortens store hours during hard times, cutting back on overhead, forcing customers to buy more cones over a shorter period. This also restricts availability of supply, and Bob tries to keep prices up. Both forces tend to cut down on work, production and tax flow during hard times. Our economic piston is slowed down from two forces acting to stymie each other, but both cutting back on consumption and production. We also note that all supply comes from demand in the absolute. People without money have no demand in the marketplace, though very much demand due to poverty in the absolute. These void Say’s Law.
Going through America’s recent past:
Reagan deregulates, cuts taxes, increases military spending, creates debt, while manufacturing leaves the country with the promise of service industries and high tech taking up the slack. Ron and Maggie’s Service Industry New Age. Hey, who wants those smoky, dirty smokestacks in Yorkshire, New York State or anywhere else? And this also makes skimping on environmental policies for cleanups and restrictions on pollution much more palatable and affordable. No factories, less pollution by default. The irony of fiscal conservative Reagan priming deficit spending is also noted. High tech development also helped Reagan.
Ross Perot rises to condemn that Sucking Sound of Jobs leaving the country. He tries to stem it by running for office. The sucking sound continues. Service industries and bureaucracy remain at home to some extent to control and manage offshore assets.
Clinton comes in while the sucking of jobs from manufacturing continues, offset somewhat by new technology and service industries. We also have worldwide advances in technology producing wealth along with population growth that must spur industry to some extent, that freetraders all claim as the fruits of freetrade. Democrats brag about lowering the debt that fiscally conservative Republicans created. They fail to note that sucking sound of manufacturing jobs going out is followed by the sucking sound of the wealth underlying the pensions, and the social security net going out under Clinton. Where do they think all that money is coming from, taxes on Microsoft? Enormous wealth is wasted building infrastructure such as the Big Dig in Boston, shameless corruption, while people like Ted Kennedy, Clinton and others feed the maw of the corrupt beast. So much for the rebuilding of infrastructure. The crappy Big Dig Tunnel was falling apart before it was finished.
George W and Cheney come in and start more wars, driving up the deficit, undermining the economy. Terrorism conveniently occurs to justify further loss of privacy and liberty, and more deficits and wasteful ill-advised foreign intervention.
Obama comes in on the tail of ruination of the service industries left to tend to overseas investment. The country is a debtor nation big time without much of anything to show for it. Uncontrolled illegal immigration continues to burden the country, aided by Obama and Hillary. Obama pushes more student loans for jobs that will not be there, more defaults on loans, instead of jobs and on the job training. He supports a worthless Mars mission instead of setting up on our own nearby Moon that would help science and technology much more effectively. Ruin, ruin, ruin America. The corrupt education system, corrupt healthcare system, corrupt everything continue to despoil the current life of the country. Meanwhile, we have a phony recovery brought on by more part time jobs, people dropping out of the job market, early forced retirements of the managerial class. The usual phony concern for the poor whose prosperity and health are constantly being undermined by Obama, Cheney and the rest continues. Cheney blabs on about how conservative he is with his traditional lesbian daughter. The evil Christian, anti-Christ unholy rollers continue to delude people with their lies and crap. The Marxist priests, scumbags of all sorts continue to tell us Jesus was a revolutionary. The evil so called Christian right continues to tell us Jesus was a conservative. The fact is that the enemies of Jesus were both revolutionaries and conservative, hiding their rebellion against God with their evil traditions, as Jesus clearly pointed out. How could divine mandate possibly be revolution? How can the eternal principles of life that cannot be marred, do not decay, possibly have anything to do with conservatism? They cannot and do not. The wilderness is still before us, especially that 70 percent plus under the oceans. Let us get on with subduing nature, abhorring the nature worshipers, their crap about mother earth, the Nazi scum with their filth about fatherland. The nationalist patriot! Biggest mouth, biggest traitor. Greed is not good. Socialist fraud is not good. John Locke founded his drivel on a state of nature that did not account for original sin, sin as lust that is not self-interest but self-destruction along with all others who happen to be about. Paradise, sir, paradise.
Finally, briefly going back to the Carter stagflation period, why did it end with Reagan?
Reagan cut taxes, increased military spending, and did nothing to stem the flow of manufacturing out of the US. But at this time, Reagan caught the wave of the surge of personal computers. America led the world in computer chip innovation, software development. This became big business, taking the edge off the decline in American manufacturing. The old factories in Kendall Square, Cambridge, MA closed down, but the high tech biotechnology industry started its growth spurt. The empty spaces of Kendall Square heard the sound of construction of buildings for this new industry. Foreign firms came to America as well to take advantage of this from countries such as Germany, highly developed countries not worried too much about cheap labor costs. Meanwhile, the Soviet Union became bogged down in Afghanistan; China continued to grow with an understanding with the US, fending off trouble from Russia. All of this spurred sales, created an essential optimism in the marketplace.
When the Democrats came in under Clinton, money moved out to pay for the national debt. Foreign and US interests had no reason to wish the dollar to decline, dollars going into their coffers, at least not until they could convert them into hard assets. Also, a collapse of the dollar would jeopardize the value of the bonds, securities, US dollars in foreign markets. Unless the US could be invaded like a Banana Boat republic, trouble in America was bad news all around to international finance.
George W came in on the coattails of a recession and left office with a greater recession looming for Obama. He pushed up military spending to pay for wars. These wars helped control oil and gave incentive to prop up US interests to secure oil to foreign markets. Bush also ran deficits. The crash came at the end of his administration, paying the Dems back for the recession he inherited. Deficit spending provides money for market sales until the deficits become unbearable.
Obama continued to run up deficits. The US still had a strong military, but jeopardized by faltering economics. International finance still has to protect its vast investment in US debt. I already discussed the other matters of the Obama regime, how he hid the continued malaise behind food stamps, etc.
Jimmy Carter was a balance the budget type of guy. Economic growth slowed down from the heydays of the Post-WWII boom days, when America was in a great position to sell to Europe and Asia to recover. These nations and the tiger economies were now competing with the US for market share of the world economy. Carter failed to catch the high tech wave of biotechnology and the personal computer. Carter suffered reverses in foreign policy. The Soviet Union was weakening, but still expanding in Africa and Asia, potentially threatening US and European economic interests. None of this was good for spurring the economy. Carter was also a vocal Christian, not good news to the materialist jet setters who dominate finance in today’s world. So that is my explanation.
Other Works by the Author
Collected Poems I
Collected Poems II
Elements of Physics: Matter
Elements of Physics: Space
Elements of Physics: Time
Unified Field Theory: An Essay
Space as Infinity II
Golden Age Essays
Golden Age Essays II
Golden Age Essays III
Golden Age Essays IV
Golden Age Essays V
My current biography and contact links are posted at . My writings include essays, poetry and dramatic work. Though I write poetry, my main interest is essays about the panoply of human experience and knowledge. This includes philosophy, science and the liberal arts. Comments, reviews and critiques of my work are welcome. Thank you for reading my book.
A preface asks whether laissez-faire economics is a perpetual motion machine with Say's Law as the machine. The scope of the essay is stated. Chapter 1 discusses Karl Marx's Surplus Value and flaws in its assertion. For example, lower wages produce cheaper goods that lower wages can buy at lower prices. It discusses cutting labor expenses without increasing market share and where the profits might go. We see flaws in Marx's assertion. We critique Say's Law from the point of view of speculation in particular. Driving down demand by consumers to lower prices and curtailing supply by sellers to increase prices stalls the economy. Inventory goes down; confidence that people must buy in the end starts production up again. And in the end we are all dead as it is said about the lag between bust and recovery. Chapter 2 discusses Big X economics. We note that it matters where stimulant money goes. Expanding the money supply that spurs shutting down production at home so as to invest offshore is not what the taxpayer should be paying for. We target key industries and extend the profit/production cutoff point to account for people who lack money to buy. This creates jobs, paychecks and production of goods. It is important to make the right decisions. Bad investment is bad investment whether by GM or by Uncle Sam. We must make the decisions a three ring circus for politicians. People must go on the record, economic forecasts and goals laid out in the open until the system is fine tuned. If the economy is not broke, let it alone and spare yourself the embarrassment of mismanaging the economy. But full employment should be the goal for social stability and future prosperity and security. Chapter 3 jokes about what the government does with surplus production, should estimates of purchases go awry. The Donald has a car sale at the White House. We finish by outlining the economy over the last third of a century and how America lost its jobs and creditor nation status with some bitterness added on the author's part.