Monday, April 20, 2015

Global "Policy Makers" Concerned About Low Growth

Ian Talley of the Wall Street Journal has penned an article today with the concerns of "policy makers"  about low global economic growth.

Almost daily, in one publication or another, we get opinions from "global policy makers" about our economic future.  These policy makers have the stage and they use it. Virtually none of their comments have much, if anything, to do with economics.  Instead, they mostly opine about political matters.  The few references to economics -- such as the reasons for very low interest rates on US treasuries and German public debt -- are almost invariably complete nonsense.

The reason for low economic growth is that these very same policy makers have managed to get policies in place that stifle economic growth.

These bad policies come from two directions: (i) one is the Elizabeth Warren approach:  despite the fact that there are virtually no losers in the stock market, assuming investors bought a diversified set of stocks at any date in the past and still own them, and that stocks have earned the average American over 10 percent annually, Ms. Warren and her ilk have decided that stocks are rigged and that Wall Street is unfair.  So, Ms. Warren is on a path to extend regulation to the point that only the one-percenters like Ms. Warren, Ms. Clinton, Warren Buffett, and the Barrack Obama crowd can make money in equities.  The returns to the average guy are being regulated out of existence, as we shall see over the next few years.  No doubt, the one-percenters will follow Al Gore's lead and make their fortunes through influence peddling and "political" private equity funds feeding off the largesse of government.

The Dodd-Frank legislation, inspired by Ms. Warren and her colleagues, have made it virtually impossible for small businesses and middle income Americans to access the commercial bank lending market.  The one-percenters have unfettered access, but small businesses, who historically drive employment and economic growth are shut out by over-zealous regulators.  This doesn't trouble wealthy folks like Ms. Warren, who don't need economic growth to maintain their  own personal status as one-percenters.

(ii) is the destruction of opportunity for low and middle income families brought about by concerns for "fairness."  The essence of these "policies" is to destroy the ladder up that has traditionally been available to folks who work hard and follow the rules.  Minimum wage legislation typifies the type of arrogant policies that cut poor people off at the knees, denying them any avenue to learn the skill sets necessary to compete in the modern world.  And, of course, these destructive policies are promoted on the grounds of "fairness."  Similarly, laws designed to promote fairness in the work place, serve mainly to reduce opportunities for minorities and others who struggle to gain access to the fruits of prosperity.  But, results don't matter to those arguing for "fairness," because invariably such advocates are never personally affected by these destructive laws.  Quite the contrary.  Their careers are only advanced, when the welfare of disadvantaged groups are trashed by these policies.  The advocates then argue that the damage done by their advocacy has other causes, as they retire to their mansions.

As these global policy makers and their fellow one-percenters like Ms. Warren and Ms. Clinton fly about the world in their private jets and chauffered limousines, extolling their personal concern for the poor and the middle class, the poor and the middle class are left to languish in the destructive path of their policies.

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