Must-Read: Noah Smith: Unlearning Economics
11 hours ago
Recently, House Speaker John Boehner channeled Rand when he said, "Job creators in America basically are on strike."
This idea that Boehner put forth in a recent speech before the Economic Club of Washington, D.C., could have come straight from Atlas Shrugged.
Businesses, Boehner said, need to be set free. Instead, "they've been antagonized by a government that favors bureaucrats over market-based solutions. They've been demoralized by a government that causes despair, when what we really need is to provide reassurance and inspire hope in our economy."
Boehner uses the language of slavery when he says, "We need to liberate our economy from the shackles of Washington."The problem with Boehner's (and all the other examples in the NPR piece) is that corporations are doing very well.
Corporate profits in the second quarter grew to $1.467 trillion annualized-up from $1.455 trillion in the fourth quarter (previously $1.476 trillion). Today's report includes annual revisions. Profits in the second quarter rose an annualized 3.3 percent, following a 39.9 percent surge the quarter before (previously 35.2). The upward revision to the first quarter is due to a downward revision to the fourth quarter. Profits are after tax but without inventory valuation and capital consumption adjustments. Corporate profits are unchanged on a year-on-year basis, compared to up 2.8 percent in the first quarter. Growth in profits is extremely volatile over recession/recovery periods and is slowing from the spike in late 2009 and early 2010. The recent peak in year-ago growth was 115.9 percent for the fourth quarter of 2009.and
The new figures indicate that corporate profits accounted for 14 percent of the total national income in 2010, the highest proportion ever recorded. The previous peak, of 13.6 percent, was set in 1942 when the need for war materials filled the order books of companies at the same time as the government imposed wage and price controls, holding down the costs companies had to pay.
There have been 10 years when corporate profits as a share of national income exceeded 13 percent — 1941, ’42, ’43, ’50, ’51, ’55, ’65, ’66, 2006 and 2010. In eight of those years, the economy, as measured by real gross national product, grew at a rate of greater than 6 percent.
The exceptions were 2006, when real growth was just 2.7 percent, and 2010, when it was 3 percent.
The 19th-century Mormon theologian Orson Pratt, who was close both to Joseph Smith and Brigham Young, stated a principle the Church of Jesus Christ of Latter-day Saints has never repudiated: “Any people attempting to govern themselves by laws of their own making, and by officers of their own appointment, are in direct rebellion against the kingdom of God.”
Ida: Sorry! So, we’ve talked about Noon, we’ve talked about Pakistan and your father, what about India? You’ve said some pretty harsh things about a certain writer cum activists on the Left–no names!–who, we in the States, kind of like. She seems, in an environment of rapacious capitalism, to be a friend of the poor and marginalised. What possible objection could you have to her?
Aatish: None except that I don’t think she’s a friend of the poor at all. She would like to doom them to a permanent state of picturesque poverty. They are beautiful to her–the poor–beautiful, benign and faceless. And that is exactly how she wants them to stay. Let me say also that it is not the poor who animate her politics. Oh, no! The people who get her into the streets are the new middle classes. This class, still among the most fragile in India, people who have newly emerged from the most dire conditions, are despicable to her. She mocks their clothes; their trouble with English; she hates their ambitions; when India wins the cricket and she sees them celebrating, her skin crawls; she wants, more than anything, to do these people down. And it is her overwhelming hatred of them that allows her to be a friend of movements that are seemingly far apart. The jihadists, the Maoists, the Kashmir movement, the anti-development people…they’re all her friends. Anyone who can prove a credible threat to the future of India is a friend of that woman. I would go so far as to say she has a prurient fascination with the enemies of India. And where do they love her? In Pakistan, and in the faculty rooms of Europe and America. No surprise there.
Also, this business of pretending she’s a lone voice in the wilderness. What rubbish! At least have the good grace to admit that not one thing she says is provocative or new; it is perfectly banal. And we know how well the universities Europe and America reward this bogus cant!