Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

16 November 2016

Krugman and Schramm: The Fool and the Wise Man

Paul Krugman, post-election: "It is true that we've been adding jobs at a pretty good pace and are quite close to full employment."

Prof. Carl J. Schramm, Opinion in 16 Nov 2016 Wall St. Journal:  "Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve.... America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics."

How low the left sets the bar for employment!  High employment is clearly not one of their premier goals.

Prof. Schramm, of Syracuse University, once headed the Kaufmann Foundation, which promotes American entrepreneurship.  He notes that:

  • Firms less than 5 years old create more than 80% of new jobs.
  • Fewer than 500,000 new businesses were started in 2015, which is a 30% decrease since 2008.
  • Over the last 8 years, the number of new businesses has decreased by more than 1 million.  The missing new businesses mean 7 to 10 million missing jobs, which would have been enough to provide jobs to the millions of discouraged workers.
  • New businesses are more likely to be started when the economy is growing at a 4% rate than when it is growing at a 2% rate.  The faster growth rate gives consumers the confidence to buy the innovative products of start-up companies.
  • Too much attention is given to Silicon Valley whose start-ups are only about 5% of all start-ups and have higher failure rates and create proportionally fewer jobs than the businesses started by franchisees, which are 40% of all new businesses.
  • Dodd-Frank suppressed the financing by local banks of local businesses in their communities, whose business prospects they are best qualified to gauge.
  • Municipal regulations are particularly protective of older businesses and likely to discriminate against new businesses.
Address these problems and he says we can enjoy 4% economic growth.  The first step was to remove the anti-jobs, anti-business party from the presidency.


threnody said...

“Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement,” he says. “It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Ship yards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.”

Oh boy... I'll wait to see what the proposed means will be, but those words sound like just cheating for a different set of people. Sigh.

Charles R. Anderson, Ph.D. said...

You may well be right. Once government becomes as large as it is, it is necessarily doing great harm to many to give favors to others. When government exceeds the bounds of its legitimate function of protecting everyone's individual rights, it begins to violate the rights of some for the benefit of others. It claims to be doing so under the rule of seeking the greater good for the greater number, but in so doing it admits that it is hurting many and violating their rights. Legitimate government does harm to no one who is not themselves violating the rights of others. Our government is four or five times larger than it would be if it lived by the legitimate principle of only protecting individual rights, so it is in the practice of doing a great deal of harm to many people. From there it is but a minor transition to a form of government in which a few favored friends with pull in government get especially big rewards at the expense of most of the people. This is the expected outcome of big government. The best to be hoped for would be a reduction of such cronyism, but since Trump is not noteworthy for his allegiance to the American Principle of Legitimate Government being limited to the protection of individual rights, I have to expect that he, like many other Presidents, will corrupt government with a great deal of cronyism.