Friday, May 29, 2015

Are We Still in the Recovery?

The economy grew an estimated minus 0.7 percent in the first quarter.  That's an annualized number, so the actual estimate is one-fourth of that.  This was the first revision from the first released estimated, which was a positive 0.2 percent.  No point in fighting over numbers, the real truth is that neither reflects a healthy economy.  Too much government, too many regulations, taxes are too high (way too high) -- all of these things virtually guarantee stagnation.

We're Europe now.  The big government folks have said for years: "If every other modern country can afford free this, free that, then why can't we?"  What we're learning -- watch Europe -- is that no country can afford any of this.  The only way this has worked is by borrowing huge amounts of money from unsuspecting bondholders.  But, slowly they are beginning to see how the end game plays out.  Greece, Portugal, Ireland, Spain, and Italy are nothing more than harbingers of where France, Germany and England are headed.  The US is headed that way as well and at a pretty fast clip.

Free markets are the antidote, no more interference in the name of justice, inequality, fairness and all the other.  Is it fair that UC Berkeley, a public institution funded by taxpayers, paid a politician $ 300,000 to give 45 minute speech last year.  That politician claims to be fighting against inequality?  Really?

When merit is replaced by political favoritism and when most employees feel they are 'entitled' to this and to that, then those at the bottom of the heap no longer have a way out.  The poor, the minorities, they are toast in an economy like this and the facts show it.  Only free markets give people the ability to rise out of poverty and carve out a new life.  Government programs just select who is to be favored with taxpayer money and imprisons those to whom they bestow that money.

If you want to see poor people do better, then let them choose who they want to work for and at what wage, even a negative wage if that's what it takes to build skills.  Let them choose the schools they want to send their children to.  Rich folks do that, why not poor folks?  Get government off the back of the poor and lower income folks and real economic growth will be the result.

The truth is that Europe never could afford all this and we can't either.  A couple of generations got away with borrowing without limit and living high on the hog.  But, now the chickens have come home to roost and it's time to let free markets come back into fashion.

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