Since at least the 1960s, Socialism and its younger sibling, Communism, have been the darlings of Leftists elitists, especially those on college campuses. When these Progressives see perceived inequities in capitalist countries, they often look to utopian solutions with Socialism being a primary fallback. The amount of time that this neo-religion has been promoted is remarkable given the failure of Socialism to create prosperity for countries and their citizens.
With the recent passing of Fidel Castro, Leftists have created eulogies that include the false narrative that Castro was a champion of his people. How ludicrous! The Cuban people continue driving cars built in the 1950s. In addition, the travels of the boat people have been in one direction only; out of Cuba and to the United States. There is no better barometer than when people vote with their feet.
Cuba is not the only country in the Western Hemisphere ruined by Socialist economic policies. Venezuela is a poster child for the disastrous economic and human consequences of centrally controlled economies. Jeff Jacoby of The Boston Globe recently published an article highlighting the current tragedy in Venezuela. As he points out, Venezuela had long been an economic success in South America, even before becoming an energy powerhouse. Then, in 1998 Hugo Chavez came to power with not only an anti-America bent, but a disdain for capitalism. Continue reading
Thomas Piketty , a renowned economist from France who posted an op-ed in the New York Times titled “A New Deal for Europe”. While Piketty’s topic is important, his conclusions are misplaced. His logic shows just how unapologetic Progressives are for the problems their policies have inflicted on the world.
Piketty expresses concern for the growth of the far Right in Europe. This Blog has been concerned for some time with the potential for fascism to once again rear its head in Europe. This concern stems from Europe’s unsustainable economic path that has led to the large sections of its population being negatively impacted, creating a breeding ground for discontent. This path started long before the meltdown of 2008 that Piketty refers to. Its roots stem from the Left’s Progressive policies that have dominated European politics for decades.
Piketty blames mismanagement by European governments for not only poorly creating the EU, but also managing their economic policies. While true, the EU’s creation was so poorly done that it guaranteed the current result, as economist Milton Friedman predicted in 1997: Continue reading
When the economic meltdown occurred eight years ago the government used the crisis as an excuse for interventions that included huge bailouts and significantly increased deficit spending. These radical interventions were justified by the threat without them significantly greater economic damage would occur. While even in hindsight it is difficult to determine the validity of those claims, there is enough history to understand that the interventions created long-term negative consequences to the economy.
A recent posting by Van R. Hoisington, Lacy H. Hunt, Ph.D. titled A Weak Finish to a Disappointing Year shares details about some of the consequences from the governmental and Federal Reserve’s interventions. They include:
- “Surely the economy would be kick-started by: three rounds of quantitative easing and forward guidance; a record Federal Reserve balance sheet; and an unprecedented increase in federal debt from $9.99 trillion in 2008 to $18.63 trillion in 2015, a jump of 86%. Further, stock prices had gained sufficiently over the past several years, thus the so-called wealth effect would boost consumer spending.”
- “The broadest and most reliable measure of economic performance – nominal GDP – decelerated. The 3% estimated gain registered in 2015, measured by the year ending quarter, was down from 3.9% and 4.1%, respectively, in 2014 and 2013. In fact the gain in nominal GDP in 2015 was less than the gain for any year since the recession.” ….. “All of the above economic measures were expanding at, or near, their weakest yearly growth rates in the final quarter of 2015, indicating that the economy possessed little forward momentum moving into 2016.”
- “Personal consumption, the largest category of nominal GDP, decelerated to an estimated 3% rise in the latest twelve months, down from 4% at year-end 2014, the smallest year end annual increase since immediately after the 2008-09 recession.”
- “The percentage of total auto loans in the subprime category hit a ten-year pre-crisis high in the third quarter, according to the New York Fed”
- “Industrial production slumped 1.4% over the first eleven months of 2015, with a drop of 2% outside of the automotive sector.”
- “Real per capita GDP grew only 1.3% in the current expansion that began in mid-2009; this is less than one half the growth rate in the expansions since 1790.”
As Hoisington and Hunt point out, the evidence points to the failure of the massive spending, bailouts and other unconventional monetary policies including Quantitative Easing (QE). QE has been used multiple times by the United States Europe and Japan. The failure of these policies is evident. Continue reading
Most Americans realize the economy is not heading in the right direction, even though we are years into the so-called recovery. One objective indicator of the ongoing economic is the number of people receiving food stamps, a measure of Americans in poverty.
According to the Department of Agricultural, in July 2014 nearly 46.5 million Americans received benefits under the SNAP program. More telling, July was the 35th consecutive month that over 46 million Americans received food stamps. In addition, according to CNSNews.com, over 35% Americans now receive some sort of welfare. Continue reading