Less government, more jobs 23

Kevin O’Leary, successful businessman, explains that what is needed to bring people out of unemployment poverty is less government.

From The Foundry.

Posted under Commentary, Economics, United States, Videos by Jillian Becker on Tuesday, April 8, 2014

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This post has 23 comments.

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  • Don L

    I just brought it up to date. I created this chart a couple years ago in order to inform folks of the relationships of polotics, montetyary policy and consequent.

    The attached chart shows the DOW 30 from 1969 to 2014..to today.

    Lincoln’s war set the table, Wilson, FDR and Nixon served the meal…but it was Reagan that uinleashed the dogs of the FED. Even after Nixon separated dollar from gold…everybody played nice nice as if there were still restraints…Not the Great Communicator. FED monetary manipulation went wild.

    Nixon, who declared us all Keynesians, Ford and carter employed the Fed in the nonsense of cooling off a hot economy, improved productivity deflates (a good thing) prices, so Keynesian stupidity says raise the interest rates. Borrowing, spending and counterfeiting were relativly low. Then here comes, “Well” Reagan…borrow, spend and print all you like. Everyone thinks he was great this was not growth…it was debt! And, it came crashing down.

    Greenspan went crazy dropping the interest rates. That incredible slope upward is a bubble. Yet, no politician, mainstream economist or any of the superb financial/business experts on TV was able to see what evry Austrian afherent saw…a crash on the way.

    As of the last couple months, the upward climb has halted (all those bars topping off just over 16000. That’s a sign of a pending crash…unless Bernancke does something to stop it. IT HAS TO HAPPEN. Evry time they stop the fall…the eventual consequences are worse.

    There is a support line down around 8000. Last time there Bernancke began the quantitative easing…he printed money – inflated the currency. The prices went up…niot the value, it went down. He hasn’t stopped yet. If it gets there and goes therough…kiss the cat goodbye!

    Anyway, the pres and Chair combinations and the FED rate to DOW level are all very telling

    Oh…understand this…everything between the line of chart candles (that’s what the bars are called) and the lower blue historical growth line is debt…it all has to get wiped out to get the economy back in good stead. That’s pension plans, savings, plants and equipment…unsustainable jobs in wrong industries…wiped out. See, as long as the FED delays and prints and borrows…the gap gets wider and the pain of recovery greater.

    • liz

      Great chart. Very revealing.
      Well now you had to go and pop my Reagan bubble, too!
      So we are stuck with electing either big government “neocons” who lie about reducing the size of government, or socialists who lie about everything else. Have we ever, in the last hundred years, had an administration that wasn’t one or the other of these?
      It seems that “free enterprise” is the dream that never was.

      • Don L

        Sorry…but truth before…hmmm…before something? LOL

        The entire purpose of compulsory schooling, as well as sunday school, is to drive the notion that you don’t count. That yopur abil;ity to reason is flawed. That ypu are not an expert and only experts (the clergy) can know.

        The answers to everything are just as close as recognizing the idea that you (generic) can think. “Have we ever, in the last hundred years, had an administration that wasn’t one or the other of these?” – just ask yourself, has the government ever gotten smaller?…have prices gone down?…, has the debt been reduced?…are there more folks on the dole? Your answer to your question is?__________________

        This nation grew inspite of government because there was still the idea of free-markets. Once the FED was put in place things began to change. Politicians and the bankers, with the help of sicko economists (proimarily Keynes), discovered ways to really fund cronyism.

        As long as the dollar was tied to the gold standard, no matter how bastardized it had become, there was fiscal spending restarint on government. War on Poverty, War in Vietnam and other patronage spending ctreated the scanario that taxes had to be dramatically increase to pay the bills the government created. That wasn’t politically viable…but, if you severed the dollar from gold…the FED couls borrow and counterfeit to pay the bills through the hidden tax…inflation.

        Nixon, Ford and Carter actually were pretty restrained and behaved as if the gold standard was still in place…more a matter of habit. Look at some of those FED established FED rates…they are all over the place. All based on Keynesian monetary nonsense. By the time Reagan came around…Well, debt looks a lot like growth. A good political move. Good politics is not good government. Again as this stuff becomes common knowledge…It can be fixed.

        No where in the Constitution is the word god used…they say we are a christian nation…Huh? The Constitution is specific everywhere that these colonies shall be free and independent countries…yet Lincoln gets away with “…a new nation upon this comntinent”. It is just common sense question…the trick is to understand how we have been conditioned.

        Enough.

        Later Liz!

        • Roger

          Great post! I think Wall Street is just a big gambling house supported by the FED, and “the house” always wins at the expense of the masses. Unfortunately, the public has “invested” it’s savings and retirement there. And none of it is real! It’s all phony numbers in a spreadsheet. It’s a giant shell game, moving numbers around in computer databases. There is no money that has any real value! It’s a house of cards.

          The Wall Street bailout was the biggest scam ever perpetrated on the public. I still get mad thinking about it. The bubble needs to be deflated, not inflated! And where did all of that money go? The deep pockets just got deeper.

          What gets under my collar is how all of the politicians who pumped this bubble up never had any intention of paying back the debt. I use the analogy of modern consumerism. People decide whether they can afford a purchase based upon the monthly payment. They ignore the principle, interest, and long-term payout. If they can make the monthly payment, they get to “own” that new car/house/etc. It’s the same in Congress. They are willing to pump up the debt bubble because they are only looking at the “monthly payment”. I know that’s a simplification, but it’s the same basic idea. Some are now realizing that the “monthly payment” is no longer affordable, and of course, they can’t give up the habit of living beyond their means. So, they just say as a percentage of the GNP, we aren’t overspending. Of course, the GNP is largely financed with debt, too! It’s just another phony number like the unemployment rate or the CPI. I’m not cynical am I?

          • Don L

            LOL…NO… Not At All. LOL

            • Roger

              Well, hey, let me give you some more! It’s a little off topic, but…
              I appreciated your inclusion (and Liz’s) of Lincoln in your comments. We see why Obama idolizes Lincoln. It’s his pedigree! We old time southerners still call it the war of northern aggression. It was not about slavery. It was about self-rule and state’s rights. Yes, slavery was a huge part of the southern economy, and it was a moral outrage, but Lincoln and historians used the idea of anti-slavery to sell the “just” war. The truth is these independent southern states formed a confederation to preserve their independent way of life and sovereignty. It wasn’t much different from what the original colonies did to stand up to the European powers. All of the colonies opposed giving up their sovereignty to a national government. They only agreed to a weak national government with strictly limited and enumerated powers, like the authority to raise a defensive army. State’s rights were effectively ended by Lincoln and his cronies. This allowed the consolidation of power by the national government. Only 100 years or so later, Nixon unleashed the FED. I know I’m preaching to the choir here, but sometimes I just have to vent! (No, I’m not an apologist for slavery!)
              As an aside, my namesake great great grandfather died as a confederate soldier. These men were not throwing themselves in front of musket balls and canons because they were evil slave owners. They were passionate defenders of their way of life (right or wrong), and were patriots in the sense of defending state’s rights. They weren’t going to let DC tell them how to live. Sounds familiar doesn’t it? Sherman’s march of destruction served as a stark warning of what can happen to those who oppose the feds. Resistance is futile!

            • Don L

              I don’t know why I picked up the book “Real Lincoln” by Thomas Di Lorenzo…but I did and the world rocked. As I mentioned to Liz…all of a sudden the truth is common sense.

              Slavery had ended everywhere without any violence. Only 10-15% of the southeners even owned slaves…why would they fight to protect slavery? And, given new technologies…slavery wasn’t even economically viable anymore.

              Tariffs to pay for Lincoln’s cronyism…mercantilism. His inaugural address stated no war for slavery, in fact strengthen the catch and return, but war if the detrimental to the south only taxes weren’t paid.
              He killed 5% of the population for political power.
              And, in continuation of railroad cronyism…the indians had to be eradicated…Sherman let loose again.
              Yup, you be preachin’ to da choir!

            • Roger

              Thanks. I didn’t know of that 10-15% number, but it doesn’t surprise me. My ancestor was an Irish immigrant who took a wife and settled in Georgia. When the war broke out, he took up the cause of defending his new homeland – the State of Georgia! He was just a poor farmer – no slaves. Another GGGrandfather of mine was a Quaker, also living in Georgia. He didn’t believe in slavery or war. But, he supported the southern cause as a wagon master in the Confederate supply line. His family had moved to NC a generation earlier partly because they opposed slavery! Again, he was just defending his home, freedom, and possessions.

              A lot of people died in the south, but the real devastation was economic. In many ways, some States have never recovered. It may have been 5% of the population, but the vast majority of them were young men, and the number of wounded was much higher. So, the wealth was destroyed, a generation was lost, and the next generation grew up in poverty, many without fathers.

            • Don L

              Reconstruction is best defined as the raping of the south by carpetbaggers and skalleywags.
              Repubs proudly tout themselves as the party of Lincoln…white supremacists and thieves and murderers.

              Once upon a time Democrats were the conservatives…they learned their lesson well. Repubs are still the party of cronyism (per Jillian’s post – friends of business) and the Dems surpassed them in theft and destruction…but only just.

            • Roger

              One of my favorite Senators is Jeff Sessions. Don’t get me wrong. There’s a lot to disagree with. But, I think he understands economics. He’s just one lone voice in the wilderness. He’s one of the the few who regularly calls the dems out on their fake numbers. But, he’s too polite and passive.

          • Roger

            I forgot to mention another evil about the debt as it relates to future government “obligations”. I think they knew full well that the future value of the dollar would be always declining. So, yes, I get my SS check as promised, but it doesn’t buy much!

        • Jillian Becker

          Have prices ever gone down? Yes. Electronic goods. especially those that compute, have gone down and down. I’ve watched them fall through the decades. But this does not invalidate your main points of course. By the way, this is from our Facebook today, summing up an article by Walter Williams: The difference between being pro-business and pro-market: A politician who is a “friend of business” is a guy who does favors for his friends; a politician who is pro-market is a referee who will refuse to help protect his friends (or anyone else) from competition. The friend of business supports industry-specific or even business-specific loans, grants, tariffs or tax breaks. The pro-market referee opposes special treatment for anyone.

          • Don L

            Great comparison…thanks for sharing

            Yes, prices come down in industries experiencing incredible innovation, massive market acceptance and improved productivity in manufacturing. Exceptions not the rule. And, these lower prices are inspite of the FED chronic inflating. Think of the growth and lower prices if the FED wasn’t interferring at all.

            Consider, the goal of the FEd inflation is about 2% (Burro’s buddy Milton was about 1.5%…and he fallaciously thought honest free-market referees would do this…right!). To achieve this in a functioning economy with growth of about 4%/annum…the FED has to inflate by 6-8%. They can’t possibly get it right…they don’t.

            Keynesians wrongly equate lower prices with deflation…a shrinking of the money supply. Which in and of itself isn’t bad…its a stronger dollar. It is only bad for government where cronyism and other fiscal wrongdoing is the mainstay.

      • Roger

        I feel your pain! That’s why I only voted for Reagan the first time! My libertarian awakening happened in 1983, and I began to see what Don L is talking about. I think free enterprise died a long time ago because of government interference. Ironically, capitalism got the blame, when it was really corporatism (and the FED) doing the damage.

        • Don L

          Hi Roger.

          In my method of evaluation…I’ve coined the idea of Centrally-Planned Debtism. To my way of thinking, in 1913, with the enactment of the FED, Free-Market Capitalism was outlawed and replaced by Centrally-Planned Debtism

          .From that point foward the criminal coordination/cartelization of fractional reserve banking established perpetual indebtedness as official economic policy of the United States. When I picture the FED meetings, I envision the Mafia commission getting together! LOL. Too bad the FBI isn’t investigating these guys!

          Further, simultaneously, the area of study known as economics as a social science was quashed. It was replaced with psuedo-science (pretend hard science) whereas incomprehensive, incomplete and unprovable mathematical-modeling of economic history was adopted as the means by which government could manage/ socially-engineer/ plan the economy. Economists became soothsayers…I see exuberant growth in your future…oh man. They’ve never been right.

          Later.

          • Roger

            Awesome! I absolutely agree. I’m use to hearing my own echo chamber, so it’s nice to hear it from someone else, and the more we have this conversation here, the more likely it is that we can make a difference by educating others!

            • Don L

              I’m with ya!!!

    • Don L

      Chart Error Correction:

      The bold dashed line separating the Bush 43 and Obama presidential terms was on the wrong year: 2008 vs 2009. Obama was elected in 2008, but didn’t become president until 2009.

      The corrected chart is attached.

      • Roger

        I love this chart! It shows the fraud of claiming growth that is really not growth. It’s, as you say, Free Money Insanity!

  • Don L

    ARGH, I want to rip my hair out. So much wrong with this whole conversation.

    First, Aron Burnett, from her days at CNBC, has been and is an economic dunce who leans very left.

    Second, Mr Wonderful, his nickname on the Shark show, is correctly describing the role of an entrepreneur in a free-market society. What he isn’t doing is discussing the question as to why the rich are getting richer:

    When the FED puts those dollars in the bank…Goldman Sachs (GS) primarily…GS doesn’t just sit on it…it invests…it buys stock. And, in such volume that it drives prices up. So, because the FED is printing money, if you own any shares…their value will go up…not because the underlying company has done anything to deserve an increase in valuation. And, the dollars GS is using are pre-diluted money supply valued dollars. Bottom line, the new expanded money (inflation) destroys the value of the middle-class and poor folks dollar while the rich get richer…income redistribution.

    Mr Wonderful should have exposed the FED and pointed out this is Obama’s other lie: Doctor, insurance plan, lower cost of healthcare…caring about the middle-class and the poor.

    The other side of the coin…better know when to get out of the stocks…because the bubble does burst and all that debt created ‘non-wealth’ will disappear into thin air. The same thin air out of which the FED made it.

    • Roger

      Aron is short for Airhead, and she’s an economic illiterate! IMHO. I agree with what you said. What’s even more disturbing to me is the modern use of electronic magic money. Not only does the FED and fractional banking system create money out of thin air, but now they can just make an electronic deposit anywhere in the world, without having to print money or account for it. And just think what that means for the stock market, Wall Street gamblers, and all of those pension funds. This is going to end badly.

      • liz

        Like, in another Great Depression.
        Not only scary but very infuriating, because it’s the consequence of the manipulations of lying, cheating criminals we voted into power.

        • Roger

          I’m not sure you and I did that personally, but yes, we as a country did. Whenever I voted, I voted libertarian from 1984 to 2000. I think that makes me an idiot in a sense, but I voted my conscience, and I am confident that libertarians didn’t create this mess.