"I think...that the term 'capitalism' is an important one and that it should not only be retained but defended. We must clear away the rubble that has accumulated on this ancient citadel since Marx and Engels and Sombart wrote. As in the case of the excavation of Troy, only patience and devotion will permit us to triumph in the end. And the rubble is so heavy: dialectical revolution, rationalistic spirit, human exploitation, personal greed--all the cant, fury and misguided sentiment of one hundred years! The digging is worth our efforts, for at the bottom we shall find a system and a set of attitudes which have made possible material progress and the alleviation of human suffering. This system and attitudes we may as well call 'capitalism' and if we define it, for historical analysis, as the risk-taking function of private individuals (who, by the process--if they are successful--create capital) and the development and maintenance of sound fiscal policy by the state, I think we will able to save the term from the opprobrium from which it suffers."
L.M. Hacker, "The Anticapitalist Bias of American Historians" in F.A. Hayek, Capitalism and the Historians. Chicago: University of Chicago Press, 1954, p. 74.
Thursday, February 12, 2009
Tuesday, February 10, 2009
Foreign Students No Longer View US As a Land of Opportunity
I had a long discussion with a someone who is a Chinese national on Saturday. The individual is a manager in a manufacturing firm in the New York City area and a weekend MBA student at NYU's Stern School of Business. This student mentioned to me that her Chinese expatriate friends regret coming to this country and are now thinking of returning to China because of America's declining economy, its incompetent policies and its unwillingness to confront its own decline.
Moreover, she was disturbed at the recent inflation of the American monetary base and the foolhardy bailout plan that the American mass media cheers. She said that hyper inflation has begun to afflict China, and the Chinese are not happy either with the American monetary policy or the fact that they are holding over one trillion dollars in treasury bonds.
Obviously, if the Chinese decide to sell some or all of the US bonds, there will be a dramatic decline in the dollar and hyper inflation as dollars return here. Over the long run factories would return here, but the adjustment would take decades.
In my view, the United States is no longer a free country. It is a slave state. Americans in many states, such as New York, pay more than one half of their earnings to the government. Only foolish slaves would be happy to live in this condition. Americans have become a nation who do not deserve the world's respect.
On May 13, 2008 I wrote a blog entitled "Chinese Tragedy Ahead". I wrote that:
'This country and China have squandered resources in stupid ways. The bubble will burst as all credit bubbles do. America may have enough resources to reassess its errors. The Chinese likely do not, and many there will be hurt."
Moreover, she was disturbed at the recent inflation of the American monetary base and the foolhardy bailout plan that the American mass media cheers. She said that hyper inflation has begun to afflict China, and the Chinese are not happy either with the American monetary policy or the fact that they are holding over one trillion dollars in treasury bonds.
Obviously, if the Chinese decide to sell some or all of the US bonds, there will be a dramatic decline in the dollar and hyper inflation as dollars return here. Over the long run factories would return here, but the adjustment would take decades.
In my view, the United States is no longer a free country. It is a slave state. Americans in many states, such as New York, pay more than one half of their earnings to the government. Only foolish slaves would be happy to live in this condition. Americans have become a nation who do not deserve the world's respect.
On May 13, 2008 I wrote a blog entitled "Chinese Tragedy Ahead". I wrote that:
'This country and China have squandered resources in stupid ways. The bubble will burst as all credit bubbles do. America may have enough resources to reassess its errors. The Chinese likely do not, and many there will be hurt."
They Said It Couldn't Be Done: A President Even Less Competent Than George W. Bush
Yes folks, they said it couldn't be done. How could two major parties representing 310 million people find a president even less competent than George W. Bush?
George W. Bush doubled the money supply and socialized banking. Barack H. Obama found a way to make Bush's incompetent bailout concept even worse---load it with graft, pork and stupidity. The Bush bailout was to be an economic disaster. The Obama bailout, a social cataclysm.
George W. Bush doubled the money supply and socialized banking. Barack H. Obama found a way to make Bush's incompetent bailout concept even worse---load it with graft, pork and stupidity. The Bush bailout was to be an economic disaster. The Obama bailout, a social cataclysm.
Monday, February 9, 2009
President Andrew Jackson on the Current Economic "Crisis"
President Andrew Jackson vetoed the Congressional bill renewing the charter of the Second Bank of the United States and then moved the federal government's assets out of the bank, fearing that the BUS would have otherwise bribed Congress to override his veto. The following considerations in President Jackson's 1837 farewell address are peculiarly relevant to the incompetent policies of today's Federal Reserve Bank and its responsibility for the current banking problems:
"The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain...In times of prosperity, when confidence is high...[the banks] extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when...public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people...It is not by encouraging this spirit that we shall best preserve public virtue and promote the true interests of our country; but if your currency continues as exclusively paper as it now is, it will foster this eager desire to amass wealth without labor; it will multiply the number of dependents on bank accommodations and bank favors; the temptation to obtain money at any sacrifice will become stronger and stronger, and inevitably lead to corruption, which will find its way into your public councils and destroy at no distant day the purity of your Government. Some of the evils which arise from this system of paper press with peculiar hardship upon the class of society least able to bear it...It is the duty of every government so to regulate its currency as to protect this numerous class, as far as practicable, from the impositions of avarice and fraud...Yet it is evident that their interests can not be effectually protected unless silver and gold are restored to circulation...
"The distress and sufferings inflicted on the people by the bank are some of the fruits of that system of policy which is continually striving to enlarge the authority of the Federal Government beyond the limits fixed by the Constitution. The powers enumerated in that instrument do not confer on Congress the right to establish such a corporation as the Bank of the United States, and the evil consequences which followed may warn us of the danger of departing from the true rule of construction...Let us abide by the Constitution as it is written, or amend it in the constitutional mode if it is found to be defective."
---President Andrew Jackson, Farewell Address, 1837. Quoted in Harry L. Watson, Andrew Jackson vs. Henry Clay: Democracy and Development in Antebellum America. Boston: Bedford St. Martin, 1998, pp. 246.
"The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain...In times of prosperity, when confidence is high...[the banks] extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when...public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people...It is not by encouraging this spirit that we shall best preserve public virtue and promote the true interests of our country; but if your currency continues as exclusively paper as it now is, it will foster this eager desire to amass wealth without labor; it will multiply the number of dependents on bank accommodations and bank favors; the temptation to obtain money at any sacrifice will become stronger and stronger, and inevitably lead to corruption, which will find its way into your public councils and destroy at no distant day the purity of your Government. Some of the evils which arise from this system of paper press with peculiar hardship upon the class of society least able to bear it...It is the duty of every government so to regulate its currency as to protect this numerous class, as far as practicable, from the impositions of avarice and fraud...Yet it is evident that their interests can not be effectually protected unless silver and gold are restored to circulation...
"The distress and sufferings inflicted on the people by the bank are some of the fruits of that system of policy which is continually striving to enlarge the authority of the Federal Government beyond the limits fixed by the Constitution. The powers enumerated in that instrument do not confer on Congress the right to establish such a corporation as the Bank of the United States, and the evil consequences which followed may warn us of the danger of departing from the true rule of construction...Let us abide by the Constitution as it is written, or amend it in the constitutional mode if it is found to be defective."
---President Andrew Jackson, Farewell Address, 1837. Quoted in Harry L. Watson, Andrew Jackson vs. Henry Clay: Democracy and Development in Antebellum America. Boston: Bedford St. Martin, 1998, pp. 246.
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