Category Archives: Business

Business, Economics, Political Commentary

The Catastrophic Response

9 Comments

The nation is being run by looters and vandals:

As more and more startling facts emerge we are finding almost criminal ineptness by Washington compounded by BP’s almost criminal negligence. As with many crises, Washington’s reactions cause greater damage than the event itself. Yet lurking in the mess are the extreme environmentalists staffing the Obama Administration with their declared agenda of shutting down all offshore oil drilling. The Sierra Club has bragged about how it helped shut down all new coal generating electricity plants. Other environmentalists are still happy that the Three Mile Island crisis succeeded in ending all new nuclear-generating power plants. Preventing new offshore oil drilling in Alaska is another of their primary objectives.

Now CNN reports that almost all new drilling activity has been suspended for over two months. This includes shallow wells in less than 500 feet of water—despite Obama’s statement that such wells would not be affected by his orders to cease all deep-water (over 1,000 feet) drilling. After thousands of deep-water wells have been drilled successfully without spills, the Interior Department, under Secretary Ken Salazar, has so delayed permitting and continuing operations as to possibly bring financial ruin to countless smaller companies. It would be similar to shutting down all airlines after a single crash. It may be that Salazar and his gang are just so ignorant of business that they think the government can simply shut down the super-sophisticated flow of supplies and men and then later restart it like flipping an electric light switch. It’s already estimated that it will take two years or longer to get Gulf production back to its pre-suspension levels. Meanwhile, deep-water drilling rigs—which cost over half a million dollars per day to operate—are being sent away from the Gulf to work in Africa and Asia where they are wanted. It will take months, if not years, to bring them back. Some 100,000 high-paying jobs are now at risk. Already the number of deep-water rigs has dropped from 42 to 19.

But they’ll blame “deregulation.” And George Bush.

Business, Economics, Media Criticism, Political Commentary

Jonathan Chait

21 Comments

…versus reality.

We can’t do anything about the White House for another two years, but I’ll bet that a Speaker of the House other than Nancy Pelosi would be a huge shot in the arm for business confidence.

[Update a while later]

The Lady Gaga economy:

Right now, there’s lots of demand for Lady Gaga, say; but maybe too many houses, cars for sale, and hokey Internet startups.

Economic recovery requires massive spending cuts, deregulation, privatization, tax-cutting, avoidance of monetary inflation, and elimination of government-granted monopolies and favors. But, more importantly, economic recovery requires allowing prices and wages to adjust to market clearing levels. Politicians don’t allow that, so downturn is deliberate policy in a sense. Politicians instead stimulate demand in random, whim-driven ways that create new distortions that harm us later (when they’re out of office, or their earlier misdeeds are forgotten or forgiven).

Such policy prescriptions foster political ends that have little to do with actual economic recovery. Recession is already inevitable if government does not perform its core function of preventing the interest group manipulation that distorts smooth economic enterprise. It’s doubly so when politicians deliberately distort the economy’s workings.

Beyond performing its “classical” functions of maintaining order and thwarting contrived scarcity, government can only serve as a transfer mechanism. Inherently limited in what it can contribute to the real economy, it can certainly subtract a lot.

And it certainly has.

[Update a while later]

The Money Honey weighs in:

You are seeing businesses follow the growth outside of the United States. But absolutely – that is the positive. The reason that they’re not hiring right now is because there is a tremendous amount of uncertainty. And that has everything to do with the policies coming out of this administration. Higher taxes in 2011, higher expenses as a result of health care costs. That’s why they’re not hiring.”

Well, duh.

Business, Economics, Philosophy, Political Commentary

The Legacy Of Bankruptcy

48 Comments

…of “progressives.”

The Founders’ understanding of the origin of government, in turn, proceeds from a recognition of the difficulty many individuals have in honoring the obligations that flow from the equality principle. Government is formed, in other words, for the express purpose of better enforcing this duty among men, thereby better securing the freedom of all. “If men were angels,” as Madison famously wrote in Federalist 51, “no government would be necessary.” Precisely because men are not angels, because many are strongly inclined to violate the rights of others when it is in their interest to do so, individuals consent to enter into the social compact, and establish government on the understanding it will use its powers to restrain those domestically and internationally who would violate their freedom. In principle, then, the power of government is not absolute but is limited to whatever actions are necessary to secure the natural rights of its members.

By rejecting the existence of natural rights, accordingly, the Progressives consciously repealed this limit: “It is not admitted that there are no limits to the action of the state,” Merriam observed, “but on the other hand it is fully conceded that there are no ‘natural rights’ which bar the way. The question is now one of expediency rather than of principle. . . . Each specific question must be decided on its own merits, and each action of the state justified, if at all, by the relative advantages of the proposed line of conduct.” In devising the content of the law, legislators need not worry about respecting the individual’s natural right to rule himself, because “there are no ‘natural rights’ which bar the way.”

In principle, accordingly, all of the rights previously believed to inhere in the individual — e.g., the rights to life, to physical liberty, to decide whom to marry, to enjoy the fruits of his labor, to speak freely, etc. — were now subject to public disposal. Whether and to what extent government allows individuals to control any aspect of their personal concerns was now purely a matter of how it viewed the consequences of doing so. To illustrate just how far the Progressives were willing to take this, Merriam, in drawing the foreign-policy implications of this change, declared: “Barbaric races, if incapable, may be swept away; and such action ‘violates no rights of these populations which are not petty and trifling in comparison with its [the Teutonic race’s] transcendent right and duty to establish legal order everywhere.’” As Progressive economist and New Republic editor Walter Weyl summed up this shift in 1912, America was now “emphasizing the overlordship of the public over property and rights formerly held to be private.”

Read all.

Business, Political Commentary, Space, Technology and Society

Grazing Dinosaurs

33 Comments

Wow. Am I unimpressed with ESA’s plans for a new rocket:

Multiple designs for a two- or three-stage rocket with cryogenic, solid-fueled and methane/oxygen main stages will be studied not only for their performance, but also for their long-term operating costs.

While no decision has been made, the early design work will focus on a vehicle that would add or subtract strap-on boosters to lift satellites weighing as little as 3,000 kilograms and as much as 7,500 kilograms into geostationary transfer orbit, the destination of most telecommunications satellites.

Unlike the current Ariane 5, the next-generation launcher would, under the preliminary designs being investigated, launch one satellite at a time into geostationary orbit, not two as typically is the case with the current Ariane 5.

And this huge breakthrough in launch technology will be available in only fifteen years.

Between 1945 and 1960, we went from the DC-3 to the 7407. Between 1955 and 1970, we went from Aerobees to moon landings. And between now and 2025, the Europeans want to develop yet another expendable rocket. I guess they learned the lesson of the Shuttle. It was the wrong lesson, but at least they learned a lesson, right?

Business, Economics, Media Criticism, Political Commentary

Now I’ll Have To Rethink My Position

24 Comments

Are the elite starting to turn against Obama?

“If you’re asking if the United States is about to become a socialist state, I’d say it’s actually about to become a European state, with the expansiveness of the welfare system and the progressive tax system like what we’ve already experienced in Western Europe,” Harvard business and history professor Niall Ferguson declared during Monday’s kickoff session, offering a withering critique of Obama’s economic policies, which he claimed were encouraging laziness.

“The curse of longterm unemployment is that if you pay people to do nothing, they’ll find themselves doing nothing for very long periods of time,” Ferguson said. “Long-term unemployment is at an all-time high in the United States, and it is a direct consequence of a misconceived public policy.”

But…but…Nancy said that paying people unemployment was the fastest and best way to create jobs!

Ferguson was joined in his harsh attack by billionaire real estate mogul and New York Daily News owner Mort Zuckerman. Both lambasted Obama’s trillion-dollar deficit spending program—in the name of economic stimulus to cushion the impact of the 2008 financial meltdown—as fiscally ruinous, potentially turning America into a second-rate power.

“We are, without question, in a period of decline, particularly in the business world,” Zuckerman said. “The real problem we have…are some of the worst economic policies in place today that, in my judgment, go directly against the long-term interests of this country.”

Gee, Mort, I could have told you that two frickin’ years ago. Why did it take you so long to catch on that you were one of the rubes?

And I loved this:

Ferguson warned: “Do you want to be a kind of implicit part of the European Union? I’d advise you against it.”

This was greeted by hearty applause from a crowd that included Barbra Streisand and her husband James Brolin. “Depressing, but fantastic,” Streisand told me afterward, rendering her verdict on the session. “So exciting. Wonderful!”

Brolin’s assessment: “Mind-blowing.”

To be fair, though, I suspect that you could blow Brolin’s mind with a butterfly wing.

This can’t be good for his renomination prospects. The long knives will be out on November 3rd, I suspect.

Business, Economics, Political Commentary

The Argument Never Ends

20 Comments

Keynes versus Hayek. Of course, it’s never an argument about how best to revive an economy — it’s an argument about how to either maximize government power, or to liberate the people from an overspending, overtaxing tyrant.

[Update a few minutes later]

Lynne Kiesling has more thoughts:

This theme of “economic control becomes political control” is crucial to making sense of the corporatist nature of political activity, and why regulation is so pernicious for individual well-being and liberty.

Hayek is, if not one of the first to make this connection, certainly the most prominent early proponent.