Saved? According to Whom?

According to Yahoo! News Obama has been reported as stating the now one-year-old stimulus package saved the economy and has helped avoid a depression.

Absurd. As has been noted before it is logically impossible for the government to stimulate the economy since it cannot create monetary value; only transfer it from here to there. If Obama is correct (and that is extremely dubious given his complete lack of credibility, as noted in Lies Against Reality parts I and II) that his stimulus plan has caused approximately 2 million people to retain their jobs then it is also true that he has caused approximately 2 million people to lose their jobs since the stimulus money is composed entirely of tax money. Obama's efforts are worse than useless.

Regarding Obama's statement that he has helped the U.S. avoid a second depression, I previously noted in Another Successful Reality Evasion Maneuver by Pilot Obama that

...no one is at liberty today to say whether or not America has avoided a depression since the concept is not precisely defined; that is, it has not been given strict standards that give us the precise measurements that would determine when a depression is officially present. As of right now the concept is merely a vague approximation used to describe an economic situation that is more intense than a recession, though exactly how much more intense is what is unknown. For what we know we could be in a depression right now but not really aware of it since our present standard of living does not give away to national suffering so quickly.

Without objective criteria the line between a recession and a depression is very fuzzy.

These claims are without justification from logic or economic principles, and should be immediately dismissed. Let us not forget that the Great Depression lasted for over a decade when it could have died out as a recession in a handful of months, due to all the "stimulating" of the economy done by FDR. How else will Obama choose to "save" the economy during the rest of his term?

Another Successful Reality Evasion Maneuver by Pilot Obama

Two posts ago I noted the irony of Barack Obama being concerned about excessive government spending damaging the economy after he had already participated in not merely record, but historical levels of government spending and intervention into industries. Well, it turns out he changed his mind and is no longer worried:

President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to "spend our way out of this recession" until more Americans are back at work.

After being concerned about too much spending he now wants more spending since he thinks the last round was not enough? Make up your mind!

"We avoided the depression many feared," Obama said in a speech at the Brookings Institution, a Washington think tank. But, he added, "Our work is far from done."

Actually, no one is at liberty today to say whether or not America has avoided a depression since the concept is not precisely defined; that is, it has not been given strict standards that give us the precise measurements that would determine when a depression is officially present. As of right now the concept is merely a vague approximation used to describe an economic situation that is more intense than a recession, though exactly how much more intense is what is unknown. For what we know we could be in a depression right now but not really aware of it since our present standard of living does not give away to national suffering so quickly.

A major part of his package is new incentives for small businesses, which account for two-thirds of the nation's work force. He proposed a new tax cut for small businesses that hire in 2010 and an elimination for one year of the capital gains tax on profits from small-business investments.

Tax cuts that will amount to nothing given Obama's proposed spending. For every dollar the government spends that is one fewer dollar for a private citizen to spend. Since rising taxes would be far too obviously hypocritical on Obama's part, I predict that he will resort to printing money, and, of course, printing money amounts to a hidden tax since it devalues/confiscates the value of the money of private citizens. The ridiculous episode of hyperinflation in Zimbabwe, for instance, has made it so that one-hundred-trillion Zimbabwean dollars ($100,000,000,000,000) is only valued as equivalent to ten U.S. dollars ($10).

Obama also proposed an elimination of fees on loans to small businesses, coupled with federal guarantees of those loans through the end of next year.

Which will do further damage. Elimination of fees on loans will make loans unprofitable and thus unbeneficial from the investor's perspective, and the federal guarantees will only exacerbate the problem by making it almost certain that loan companies will have to suffer loan defaults and thereby risk going out of business. Remember the Community Reinvestment Act, which caused the financial crisis in the first place?

I could go on analyzing this article, but it becomes depressing to think not only are economic mistakes continue to be made and are continuing to harm the economy, but that our politicians are making precisely the same mistakes down to the last detail. It should become quite apparent now that, despite his impressive education, Obama is an intellectual and philosophical mess.

Economic recovery is very much longed for, but it seems we must bear the difficulties for a while longer yet.

No Phoenixes Here

Senator John Kerry is planning on holding Senate meetings on April 30th to consider possibly extending aid to the troubled newspaper industry.

To my friends I had been speaking as to why it would be atrociously silly to try and bail out the newspaper industry, using an analogy, but I never expected the politicians to seriously consider it! I will reserve the analogy for the end of this post.

John Kerry, of course, makes the same weak arguments in regards to extending aid:

"America's newspapers are struggling to survive and while there will be serious consequences in terms of the lives and financial security of the employees involved, including hundreds at the Globe, there will also be serious consequences for our democracy where diversity of opinion and strong debate are paramount," Kerry wrote in his letter, addressed to "the Boston Globe family".

His argument consists of two points: that 1) serious economic consequences and 2) public debate losing diversity in opinion will be the result of the newspaper industry being left to suffer or fail.

In both his points, he fails to realize that demand for news sources is not disappearing, but rather shifting. People are reading fewer newspapers, but more and more of other news sources (Internet and television). Information dissemination to the public is only changing form, not amount. Economically, while certain companies may be laying off their staff, other companies are hiring because of the increased demand of their particular product/service, so the economy will not be harmed unless there is governmental interference. Debate-wise, things will only become more efficient. The only group that would be harmed by the newspaper industry failing is those who refuse/are unable to resort to the television or Internet, and even then the harm would still be minimal considering many restaurants offer televisions (mostly on news or sports stations) and countless libraries offer free Internet access.

Another thing Mr. Kerry fails to realize is that extending aid to the newspaper industry would actually achieve what he asserts to be preventing. He would achieve economic harm by giving out capital because that would deprive another company of capital (remember we are speaking of tax dollars, and it does not matter whether it is directly taxed via taxes or indirectly taxed via printing money); he would achieve lack of diversity in debate by making newspapers less apt to criticize politics considering political leaders are their investors. (One piece of legislation actively seeks to infringe on freedom of speech by prohibiting political endorsements, which, of course, logically means political un-endorsement is prohibited as a corollary. To clarify, the reason why un-endorsement would be prohibited is because by asserting what one stands against clues others into what one stands for, a sort of process of elimination. Therefore, the alternatives of criticism and endorsement are both forbidden.)

Finally, let us not forget, bailing out the newspaper industries would be futile. The analogy I use to illustrate this is that of comparing this to the hypothetical bailing out of the now extinct cassette tape. It is obvious why cassette tapes would be doomed to extinction regardless of how large of a subsidy the companies received: people would simply not buy them. Compact Disks are what are in demand. The same applies to newspapers: no sense in bailing them out when the consumer base is demanding televised and Internet sources. What does Mr. Kerry expect? A Phoenix rising out of its (newspaper) ashes?

The truth of the matter is that we cannot afford to *keep* the newspaper industry. If we want economic progress and higher efficiency, we must let devalued and inefficient industries fail.