Cafe Hayek: The Challenge is to Create, Not Jobs, but Wealth

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February 20, 2008

The Challenge is to Create, Not Jobs, but Wealth

Don Boudreaux

Today I sent this letter to the Washington Times:

Like economic alchemists, Senators Clinton and Obama peddle plans to spend billions of taxpayer dollars on various government projects that will create millions of jobs ("Obama's economic plan," February 20).

Creating jobs - creating demand for workers - is no challenge. Vandals and arsonists do so routinely. What is a challenge is to create opportunities for workers to earn good incomes while producing real value for others, where value is confidently measured by the amounts that buyers voluntarily pay for what is produced. As far as I know, Sens. Clinton and Obama (and, for that matter, McCain) have never created a business whose success relied upon producing outputs efficiently and then selling these outputs at prices attractive to consumers.

So why suppose that any of their "plans" to create innovative industries and jobs are anything more than the cheap-to-dream-up fantasies of self-important politicians accustomed to spending other people's money?

Sincerely,
Donald J. Boudreaux

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Comments

Obama and the Democrats have opposed a 3rd airport construction Chicago. The new airport would be built in Will County, a mainly Republican area. Democrats oppose it because they won't control the jobs even though it would create thousands of jobs in transportation and other fields. Democrats are only interested in creating government jobs they control. That's how a political machine works.

Posted by: jorod | Feb 20, 2008 3:29:41 PM

Don:

How to do this without totally revamping the broken American K-12 system? We need more scientists and engineers. We aren't teaching math and analytical skills anymore. To be competitive with foreign students, Americans need to have 12th graders already mastered 1st course of Calculus. Anything less is competitive death.

Posted by: FreedomLover | Feb 20, 2008 3:32:12 PM

Why should government's run the schools at all? Cut the state-school link & schools will revamp themselves.

Posted by: Hans Luftner | Feb 20, 2008 3:42:03 PM

FreedomLover,

You state that "we need more scientists and engineers" and imply that the number of scientists and engineers who are foreign is increasing, at least relative to the number that are American. Is this correct?

If so, I note, that whether "we" have more scientists and engineers, depends entirely on the arbitrary designation of who is included in the "we". Are "we" New Yorkers? Americans? North Americans? The West? Democracies? Free marketers? Perhaps Non-Africans? or even blondes?

I would suggest to you that "we" do indeed have more scientists and engineers, at least "we" do in almost every sense of relevence to economics.

Posted by: Lee Kelly | Feb 20, 2008 3:45:32 PM

"So why suppose that any of their "plans" to create innovative industries and jobs are anything more than the cheap-to-dream-up fantasies of self-important politicians accustomed to spending other people's money?"

Because policy matters.

From 1920 to 1933 real per capita GDP (2000 dollars) went from $5,721 to $5,056.

Then from 1933 to 1946 it went to $11,241.

Then by 1978 it doubled to $22,526. It still hasn't doubled over the next 30 years but its fastest gain was between 1993 and 2001.

Policy matters.

Posted by: muirgeo | Feb 20, 2008 4:17:11 PM

Lee Kelly:

It's all fine and good that companies can hire H-1Bs to fill their science/engineering rosters for now, but for native-born Americans(any race), it's a race to the bottom of the job pool(think Wal Mart). I'm talking about what it takes for a revolution in math/science education for native-born Americans.

I also realize that the current culture is absolutely toxic to analytical thinking, which is the underpinning of any math study. An entire generation raised on MTV and video games is not showing capable of basic reasoning skills. W/o them a person is clueless to even navigate basic algebra.

Posted by: FreedomLover | Feb 20, 2008 4:29:24 PM

Jorod,

you're totally missing the point. An airport is useful and usefulness is not a requirement for socialists. Better we should pay people to dig ditches and then fill them up again and call that a real job. Better we should force people to pollute the environment even more by recycling things that are not efficient to recycle and create really crappy low paying jobs picking through other people's rubbish to sort the "recyclables" than to allow greedy capitalists to exploit The Workers by paying them to do useful and interesting things.

We aren't teaching math and analytical skills anymore.

I was a high school math teacher for about a minute - that's all I could take. We're far too busy teaching our kids to be "socially conscious" and the benefits of moral relativism, along with feeling good about themselves even as we teach them to be uncompetitive losers to bother teaching them to solve for X.

Lee, while I agree with you, the state of our school system is sad regardless of how we define "we". I suppose this is what happens when we allow the government to run it.

Posted by: Methinks | Feb 20, 2008 4:31:06 PM

Somehow the culture has to make it "cool" for kids to want to study math, physics, chemistry again.

Posted by: FreedomLover | Feb 20, 2008 4:31:41 PM

Methinks:

You have to understand that math is a dead, white male thing. Too politically incorrect to teach.

Posted by: FreedomLover | Feb 20, 2008 4:32:45 PM

Freedomlover,

That point was driven home for me when I observed the la-dee-da attitude of an economist and the head of elementary education toward their child's (my pupil's) basic algebra education. Poor, unlicensed, 15 year old dear stole a car, went for a joy ride and ended up in the slammer the night before my final. Obviously, his parents expected me to retest him another day and give him a grade he didn't earn so that he can go on to fail in the next level of math. all this after I dragged out every trick in the book to make math "cool" for this schmuck.

Probably like a lot of other posters here, I always signed up for the teachers who didn't grade on a curve, sat in the front row, never missed a day of class, and used every wrong answer as an opportunity to learn. As a result of such behaviour, we became financially successful. Now, we're being told that we need to be punished for that success and that people like my former pupil are victims of our success. Thus, we must be punished by wrenching the product of our labour away from us to give it to him in the form of tax subsidies. This downward spiral has been accelerating since Reagan left office.

In light of this, why would anyone be motivated to actually learn, work and produce? Unfortunately, I think that people's behaviour (lack of interest in devoting the time to obtain useful skills) is completely rational in light of encroaching socialism. The fact that the United States taxes you for 10 years after you give up your citizenship and taxes you wherever you live in the world makes it more difficult to....shrug. For non-US citizens it makes total sense, though. They can come here (or go anywhere in the world) and work and really better their lives. In most cases, by simply moving around the world, they are out of reach of their home countries' and US tax policies.

Posted by: Methinks | Feb 20, 2008 5:09:52 PM

Methinks,

" I think that people's behaviour (lack of interest in devoting the time to obtain useful skills) is completely rational in light of encroaching socialism."

I recognize the same behavior, and I agree that it is rational, but I believe it is more a function of prosperity than of encroaching socialism. I believe the socialism is itself a function of prosperity. Will Durant said that, "Civilizations are born stoic and die epicurean". I think the "die" part might be a bit dramatic, but civilizations certainly do fluctuate along those lines.

Posted by: Randy | Feb 20, 2008 5:24:03 PM

Socialism rewards mediocrity and punishes productivity.

Just as we are learning that real wealth lies in 'knowing how' to produce.

Posted by: Sam Grove | Feb 20, 2008 5:30:56 PM

'Because policy matters.

From 1920 to 1933 real per capita GDP (2000 dollars) went from $5,721 to $5,056.

Then from 1933 to 1946 it went to $11,241.'

What a loaded comparison! The end point of the first period coincides roughly with the depths of the recession which Roosevelt had little idea how to (new) deal with. The second set contains WWII not as far as I recall a Roosevelt policy. Thank Japanese policy for that. WWII equates to Don's 'vandalism' in spades. It created jobs and carnage galore.
I agree nevertheless that policy can make a difference but WWII trumped any domestic policy as a cause of the great post war boom.

Posted by: Reg Hall | Feb 20, 2008 5:51:57 PM

"An entire generation raised on MTV and video games is not showing capable of basic reasoning skills."

As an avid video gamer, I also have both a masters degree in math and an MBA, so I'm thinking you are wrong here. You should be careful with generalizations, in fact; there was an article in the latest Harvard Business Review talking about the positive skills online gamers bring to the workplace.

Maybe some consideration about who is close-minded and hindered by biases would be in order here?

Just a suggestion.

Likewise, I concur that producing meaningless jobs is a similarly meaningless exercise. What we need to do is create more wealth and innovation, and less government jobs...

Posted by: Jackson | Feb 20, 2008 5:57:59 PM

Let him who is without sin cast the first stone.

Tell me Don, as just another employee of the state of Virginia how many jobs have you created?

Posted by: spencer | Feb 20, 2008 6:19:56 PM

Can you blame Obama and Clinton for what they are selling? I blame the electorate for being gullible enough to actually believe that the president can create sustainable, well salaried, valuable work. If this was the trick to job creation, then why dont we just nationalize all of industry and have a planned economy?

Its amazing how people will eat up a small concept, such as the government creation of jobs, and not realize the incredibly negative upshot of that idea being scaled upwards(full on socialism).

Posted by: john pertz | Feb 20, 2008 6:26:52 PM

"Because policy matters...
Then by 1978 it doubled to $22,526. It still hasn't doubled over the next 30 years but its fastest gain was between 1993 and 2001."

Now come on Muirduck, we know progressivism is a religion that takes everything as truth but honestly 1993 to 2001 was not Bill Clinton's economy (although you got the first name correct). You are observing the importance of black swan private sector technological advancements. 1993 to 2001 was the Bill Gate's economy. A man who did more for you than the sum of only the positive government policies that affect you in your entire lifetime.

Posted by: Jay | Feb 20, 2008 6:36:55 PM

I completely agree with Mr. Boudreaux. Government cannot create demand for particular services out of thin air. It may create this demand through expensive (and highly inefficient) government spending, by purchasing that labor directly or subsidizing some industry to purchase the labor. However, to finance this inefficient demand, the government must borrow resources from other productive (and more efficient) uses through taxes, subsidies, or borrowing.

I am sick of hearing democratic candidates campaign on the basis that as the richest country in the world, we can afford to guarantee each person a living wage, and access to 'adequate' medical care. However, I would argue that the the lack of these guarantees is exactly what has caused America to be the leading international economy.

Posted by: Mason 3L | Feb 20, 2008 6:38:23 PM

I am sick of hearing democratic candidates campaign on the basis that as the richest country in the world,

And the most indebted.

Posted by: Sam Grove | Feb 20, 2008 6:42:20 PM

Randy, I'm in complete agreement.

Posted by: Methinks | Feb 20, 2008 6:49:41 PM

Don,

as a college student and a free-market economist this is a tricky topic to tackle I believe that we should let the market take its course. Taxing people to crate non-successsful job is a waste on the tax payers dollars. As a free market economist I believe that the government should not make millions of jobs to meet the demand of the unemployed but maybe give incentives to job that already exist to expand and spark the maket and make more opportunity for the unemployed (Like the O hare airport expansion project in Chicago). another thing that could make a difference in the economic growth would be giving people more incentives to start their own business. Also maybe even making the United States more self sufficient instead of trading resources that can be found on our land maybe give new job to cerate those resources and distribute them to the united states.

I don't believe in taxing the richer. I think that they make more money of a reason. I would rather pay my doctor more money to do the job that I want him to do successfully. If we keep taking money from them to help the poor then there are going to stop working as hard because they make as much as the person working the drive threw window. We pay them more for a reason.

I attended a conference at the 7th annual ASET in Mesa AZ. In this conference Dr Dwight Lee a professor at the University of Georgia. He when over the ideas of Stagflation. He said that when new job are cerated that it helps both the the economy and giving money to the government. I believe in that but I don't believe that giving more taxes is the right thing. Taxes does not stimulate the economy I think that money and success does that is why I think the government shouldn't get so involved in created new job but rather help people get new job in existing companies.
What is your option? Do you think that my believes might work instead of creating new jobs making old one better and giving incentives? thank you for you time!
Jeffrey

Posted by: Jeffrey | Feb 20, 2008 7:37:15 PM

Its amazing how people will eat up a small concept, such as the government creation of jobs, and not realize the incredibly negative upshot of that idea being scaled upwards(full on socialism).

Posted by: john pertz

John does government (ie the treasury, the fed ect..) create jobs? How would Wall Street and our great Bankers and Finaciers do with out these government institutions?

What doesn't create wealth is a lot of these Wall Street paper pushers who simply repackage money and take money from those who are actually prodcing things. And they do it with the backing of the US treasury and the Fed. Man if we could just put a lot of these Wall street jackasses to work teaching, taking care of patients and building roads and stuff we'd be a lot more productive.

As I learn more and more I realize the heart of our problems lie with our monetary system and I understand more and more Jefferson and Lincoln fear of bankers.

Posted by: muirgeo | Feb 20, 2008 8:01:12 PM

As I learn more and more I realize the heart of our problems lie with our monetary system and I understand more and more Jefferson and Lincoln fear of bankers.

Down with the FED and the credit monopoly!

Posted by: Sam Grove | Feb 20, 2008 8:23:36 PM

I think the Fed monopoly has been broken already. It is apparent from the different direction the Fed funds rate and bond markets are moving.

Government should be limited to enforcing property rights.

Posted by: Mason 3L | Feb 20, 2008 8:42:04 PM

I think there was a post a while back that addressed this issue.
Basically, people don't start businesses for the purpose of creating jobs, jobs are a cost to a business.

When government creates jobs for the reasons given above, then it is not responding to market forces, but to political forces.

Because the government extracts money from the private sector, then the jobs it creates are at the expense of wealth generating businesses that may have otherwise been created, providing actual wealth producing jobs.

Posted by: Sam Grove | Feb 20, 2008 8:45:50 PM

Sam,

I think that's not true when you have huge sums of idle wealth sitting on top of the pile not doing anything when it could be building roads ect.... Again that's why huge wealth concentrations and large income inequalities are actually counter productive to a good sound economy.

Posted by: muirgeo | Feb 20, 2008 9:25:56 PM

Muirduck: "As I learn more and more I realize the heart of our problems lie with our monetary system"

She/He/It says something sensible. I agree with Sam, that international trade and the implementation of currency diversification leading to other reserve currencies (Euro/Yen/Aussie Dollar/Real) will gradually reduce the power of the Fed. Although politicians have been known to go to war to hold onto their monopoly power. My best guess is that if there is WW3 it will result from private bankers protecting their ability to extract rents.

Posted by: Jay | Feb 20, 2008 9:26:38 PM

Then Muirduck disappoints, "I think that's not true when you have huge sums of idle wealth sitting on top of the pile not doing anything"

Idle wealth? Even if Bill Gates had $1 billion sitting "idle" in a savings account that bank could then lend out a fraction of that to build private roads and the likes. There is no such thing as idle wealth, except for the coins that are stuck in your sofa. If you invest the money somewhere, that entity is investing somewhere else and so on until the capital reaches someone spending it on production.

Posted by: Jay | Feb 20, 2008 9:31:02 PM

Man, I wish people like muirduck would get a clue before unleashing uncontrolled verbal diarrhea. But, then they wouldn't be muirucks. Here's a helpful suggestion: If you don't know what a "Wall Street paper pusher" does (and you so clearly don't), you should probably refrain from plastering your ignorance on public boards. A wise man once said that it's better to stay silent and let everyone think you're an idiot than to open your mouth and remove all doubt.

Here's a little question that'll surely blow your circuit: if Wall Street paper pushers are so worthless, why would you want them teaching your children, messing around with patients or building roads? Especially since you'll be forcing them to do something they've already chosen not to do. That's just what I want taking care of my sick child - miserable idiot former paper-pusher who hates his job. Another brilliant "solution" from a Marxist.

She/He/It says something sensible.

Only if you're parsing words, Jay, and then only thanks to the laws of probability.

Posted by: Methinks | Feb 20, 2008 9:41:43 PM

huge sums of idle wealth sitting on top of the pile not doing anything

You are a fountain of economic wisdom.

Posted by: raja_r | Feb 20, 2008 9:50:00 PM

I think that's not true when you have huge sums of idle wealth sitting on top of the pile not doing anything when it could be building roads ect.

It's true then, you don't know what constitutes 'wealth', nor comprehend the function of money.

Posted by: Sam Grove | Feb 20, 2008 9:52:00 PM

Man if we could just put a lot of these Wall street jackasses to work teaching, taking care of patients and building roads and stuff we'd be a lot more productive.

Spoken like a true paternalist who embraces the nanny state. By the way (because I forgot to ask) is that your preferred policy position; the REAL change?

Posted by: lowcountryjoe | Feb 20, 2008 10:21:51 PM

On a Saturday morning there was a economic educators conference held at 7 o'clock in the morning. Sprinkled in a crowd of well dressed economists were barely awake college students bribed with extra credit. Being one of them I expected a boring speech mirroring that of what comes on CNBC's Squawk Box about economic principles that seem more interesting coming out of a text book than somebody's mouth. All joking aside, I was pleasantly surprised when Dr. Dwight Lee took the stage and said he was going to talk about a well known economist, Milton Friedman. I had no idea who this man was he was going to speak about, but this only intrigued me more. I felt like I was all alone in a packed conference room when Dr. Lee started saying things like consumption function, balance budget multiplier, and Phillips curve. So when I got home from the conference I decided on would lookup Milton Friedman on the Holy Grail of college research, otherwise known as Wikipedia. Bash it all you want but it is efficient in times like these. As I read more and more about Friedman I began to realize that he was not your cookie-cutter economist, his views were different from the other economists of his time but he also did not consider himself a free market economist. He made simple observations, if somebody is making more money it does not necessarily mean that they will spend that much more, but savings is increased by a substantial margin.

Posted by: Kevon O'Rear | Feb 20, 2008 10:30:39 PM

methinks, raja, Sam,

When last fall Bear Stearns announced its write downs last summer and the market went into panic do you agree the Fed did the right thing dropping rates and pumping in billions of new money?

You don't see this all as welfare for Wall Street that eventually everyone else pays for?

Posted by: muirgeo | Feb 20, 2008 10:51:56 PM

You don't see this all as welfare for Wall Street that eventually everyone else pays for?

Would it be better if it were welfare for people who took out zero-down loans for houses they couldn't afford, lying on their application about their income and assets to get said mortgage that now everyone who was frugal, saved and didn't gamble with other people's money has to pay for?

I'll give you a hint that I doubt you'll comprehend: the welfare for the one is the welfare for the other.

Posted by: Methinks | Feb 20, 2008 11:03:49 PM

I am a currently a student in college enrolled in a Macroeconomics course. One of the things we covered earlier in class today was probably to me the three main concepts behind our economy: Growth, Inflation, and Unemployment. If there is a small chance that the government will be creating jobs for the American people and will actually work. Then why not? I think one of the keys to growth and unemployment is to find a job with a company who provides tuition assistance so that I may be able to become better educated. The company must have the tools needed to bring production of goods and services up and also provide the best technology available. If a company provides you with the the successful tools you need to succeed with them, then you will help the company grow, and they (you would assume) reward you for your hard work by increasing your pay so that you may be able to keep up with inflation. I've also learned that you can't give up. Even though we may be falling into a "recession". things will go back up. Likel the saying goes, "what goes up, must come down".

Posted by: JaMeyer | Feb 20, 2008 11:43:53 PM

In your blog posting you ask the question “So why suppose that any of their “plans” to create innovative industries and jobs are anything more than the cheap-to-dream- up fantasies of self- important politicians accustomed to spending other people’s money? I think it’s ridiculous to suggest that because someone may not have the experience in creating a business that means they are not capable of handling the financial issues that come with running a country. Basic common sense and a basic knowledge of the issues are what counts and what matters. Experience is helpful but not absolutely necessary. I think the candidates mentioned are perfectly capable of developing plans for the economic issues of the country that will satisfy workers, and industry concerns.

In response to you suggesting the candidates mentioned in the your post (Barack Obama and Hilary Clinton) have cheap to dream up fantasies as plans for the economy, I think if your going to say that then you should provide specific examples from their plans to back up that suggestion. Yes they are willing to spend billions of taxpayer dollars on government projects that will eventually lead to job growth in their projections, but billions of dollars is not that much when you weigh the consequences of not improving unemployment, job growth and our economy. There are problems with the current state of the economy because of frivolous spending in other areas, the millions and billions of dollars spent by our government on; for instance the war in Iraq in the past 6 years is money that could be going elsewhere or put back into our economy to help with job growth. Both Clinton and Obama have pledged to end the war in Iraq which would provide them the financial capabilities to spend money in order to reach their projected objectives not fantasies.

Posted by: Kenya C. | Feb 21, 2008 12:07:19 AM

Both Clinton and Obama have pledged to end the war in Iraq which would provide them the financial capabilities to spend money in order to reach their projected objectives not fantasies.

No, it wouldn't because while the amount we spend on the war may seem like a large number, it is tiny compared to the projected growth of the current entitlement spending (let alone the entitlements each has proposed). If government make work projects could solve economic problems, then we would have gotten out of the depression in the 30's instead of well after WWII.

I think the candidates mentioned are perfectly capable of developing plans for the economic issues of the country that will satisfy workers, and industry concerns.

If that were true, if central planning worked, then the Soviet Union would have been a robust economy. No one person or collection of people can create a central plan to meet the needs of a diverse $13 trillion economy. That would require knowledge beyond human capability. What you are suggesting (perhaps without realizing it) is that a single plan will work for everyone. Ever try to meet everyone's needs with a single plan in a group of 10 people? Not easy. Now imagine trying to meet the needs of a diverse group of 300 million.

Posted by: Methinks | Feb 21, 2008 12:24:54 AM

" If government make work projects could solve economic problems, then we would have gotten out of the depression in the 30's instead of well after WWII."

That makes no sense. First you want to blame FDR for the prolonged depression policies you favor created. He didn't cause the depression, laizze faire economics like the current ones we're seeing now destroy our economy were also behind the problems back then. Second if his policies were so detrimental how did they allow for probably the strongest period of economic growth from the 40's to the 70's that this country has ever seen?

Posted by: muirgeo | Feb 21, 2008 12:52:39 AM

If that were true, if central planning worked, then the Soviet Union would have been a robust economy.

Posted by: Methinks

Oh come on. You're just evidence for the social science studies that show conservative thinkers are concrete and inflexible.

Yeah right there's either anarchy or communism and nothing in between. The problem for you is explaining away the worlds social democracies that are NOT communist and that have great economies where workers work fewer hours then Americans and have 6 weeks vacation and no worries about health insurance. And that all while you can't point to the existence of one single country doing well run by your "invisible hand god". I mean your a social darwinist right? Well how come none of your liberal based societies seem to have survived the natuural selection process except for maybe in Sudan or Papua New Guinea.

Posted by: muirgeo | Feb 21, 2008 1:11:12 AM

do you agree the Fed did the right thing dropping rates and pumping in billions of new money

I don't think we should have a FED, but as we have a FED, then it should attempt only to stabilize the money supply to match economic growth.

He didn't cause the depression, laizze faire economics like the current ones we're seeing now destroy our economy were also behind the problems back then.

You are so fond of the straw man. Laissez faire economics did not 'cause' the depression. The depression began 16 years AFTER the creation of the FED which was supposed to prevent depressions. As it so happens, the FED was inflating the money supply which gave investors the impression of economic growth beyond what was occurring. That set the stage. The actual trigger was a run on just one bank. The run could have been stopped there if neighboring banks had provided cash reserves to accommodate the run. It is thought that they did not step in because that bank was Jewish owned. By the next day, the run had spread to the other banks by word of mouth.

Where was the FED?

Frightened by events, the FED tightened the money supply, which helped prolong the Depression.

You could read Rothbard's America’s Great Depression

Posted by: Sam Grove | Feb 21, 2008 1:25:45 AM

What Senator Obama and Senator Clinton are further affirming to me from what I have read in this article is that politicians really should not play a major role in shaping our economy and the way business works in America. Do we need the United States to have some sort of governmental watch dog to make sure that businesses are operating in a legal and ethical manner? Emphatically yes. Do we need people like Barack Obama and Hillary Clinton (two people who are a far cries from being economy whizzes) creating what Don Boudreaux has called "cheap-to-dream-up fantasies" to manipulate how businesses do business? NO! I am still not sure why we as a society seem to trust government official to set the rules and come up with the ideas for how to boost our economy. After all, these politicians are not trained in the art of economics, they are trained in the art of making you believe whatever the heck they want you to. Why do you we not leave the economy to economy gurus? Does this not make sense? I wouldn't go to a doctor to get bodywork done on my car and I wouldn't go to a carpenter to ask advice about a cavity. Why then, do we put so much trust in government officials to make sure our economy is on track.

I am studying Macroecomics in Mesa, Arizona with a Professer who celebrates sweet liberty. He feels, as do I, that our economy is self-perpetuating. If we look historically, there are few instances where it seems that government intervention has proved to be the smart thing to do. Let the economy be free. Business people are not stupid, they are in business to make money, and if the government would leave them alone long enough they will always find a way as a whole to do precisely that, without government intervention.

In summary, just because Washington CAN do something, doesn't always mean they SHOULD. I think it is time people like Obama and Clinton should leave money issues to the money people and use their time doing something where maybe they can actually make a positive impact.

Posted by: Jason Jarvis | Feb 21, 2008 1:26:14 AM

IAC, your citation of laissez faire economics as a scapegoat is quite a stretch given that such a thing is pretty rare. Perhaps "laizze faire" is a different kind.

Posted by: Sam Grove | Feb 21, 2008 1:28:48 AM

Do we need the United States to have some sort of governmental watch dog to make sure that businesses are operating in a legal and ethical manner?

The watchdog is called the law and the courts.
There is no reason there needs to be special laws that apply only to business. If some act is unethical, fraudulent, or harmful to others, then it does not matter whther it is done by an individual, a non-profit, a business, or the government.

One law the same for all.

Posted by: Sam Grove | Feb 21, 2008 2:02:35 AM

Sam:

It seems we both agree about the danger of encroaching socialism, but disagree about the military and foreign policy.

Posted by: FreedomLover | Feb 21, 2008 2:26:51 AM

I think it is time people like Obama and Clinton should leave money issues to the money people and use their time doing something where maybe they can actually make a positive impact.

Posted by: Jason Jarvis

Who are these money people Jason? Are they bankers and Wall Street guys opushing complex securities then yelling for the Fed to drop rates and infuse more cash to protect their assets while the dollar is devalued and inflation and more taxes and interest on the debt further erodes the middle classes stability.

Heck no I don't want the people who make money deciding monetary policy and the rules of business. That what Kings and Queens do.

"The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the crutches of the money manipulators was probably the prime cause of the revolution"

Benjamin Franklin

And Sam it was those money manipulators that created the Fed specifically to concentrate their power and wealth. They did so in a time of laisse faire politics and economics.

Posted by: muirgeo | Feb 21, 2008 3:10:20 AM

They did so in a time of laisse faire politics and economics.

Yup. That was the blow that ended laisse faire politics & economics. I suspect I hate the Fed more than you do, Muirgeo.

Posted by: Hans Luftner | Feb 21, 2008 3:14:24 AM

Jason and others,

watch this and let me know what you think. There are actually 5 parts.

http://www.youtube.com/watch?v=_dmPchuXIXQ

Posted by: muirgeo | Feb 21, 2008 3:17:07 AM

Muirgeo, I watched that movie. None of it was new to me. It was actually the central banking scam that got me interested in monetary theory in the first place, & from there I began learning economics. Now, some five years later, here I am at 4AM on Cafe Hayek. Life can be a freaking can of worms, I tell you.

A more in-depth look at this subject is The Creature From Jekyll Island by G. Edward Griffith. It's an interesting read, although it can be a bit conspiracy-nutty for me. Certainly I don't agree with his solutions.

I'm actually more interested in your views on that movie, as it seems to contradict a great many of your stated beliefs.

Posted by: Hans Luftner | Feb 21, 2008 4:22:32 AM

Hans,

I'm not much of a conspiracy theorists but the movie seems to make some good points. As I've said more and more the problem I seem to have is with how our monetary system works.

I'm reading Milton Friedman now and he addresses the issue but doesn't seem to have a really good solution.

I don't know why you think that movie is something I wouldn't agree with. I'm convinced the people with money control the system such that they get more and more of it. The movie supports that sentiment.

I just want a system that is fair, efficient and rewards the average guy who doesn't want to be rich but just wants to make a good living being a teacher, a nurse or a laborer with a square deal. I have no problem with people becoming very wealthy but I do think that the problem is figuring how to prevent them from also concentrating power and taking over the rule making aspects of what is supposed to be a democratic society.

I just don't think a liberal society would work because I'm convinced it will always result in large accumulations of wealth and a two class society. And again those with all the money will slowly overtake the rule making process.

I don't claim to have the answers but I know it's not socialism or communism and I'm pretty sure its not classic liberalism. I think it's a more responsive democracy where elected officials position is very tenuous and where people have a more direct responsibility for there vote.

Posted by: muirgeo | Feb 21, 2008 5:21:30 AM