Watching It Burn

When a car quits running it’s most likely either out of gas or low on oil. If it’s low on oil, adding gas won’t help; similarly, if it’s out of gas, adding oil will do little to get it going again.

A WSJ editorial today reads in part: “Oregon raised its income tax on the richest 2% of its residents last year to fix its budget hole, but now the state treasury admits it collected nearly one-third less than the bean counters projected. The sun also rose in the east, and the Cubs didn’t win the World Series.” and, I might add, Oregon’s economy didn’t improve. It takes both oil and gas for a car to run properly.

Taxes have hit the wall in many states. Raising them, has (at best) had no effect on either topping-off state coffers or on improving the economy. We’ve already drained the oil down to dangerous levels; adding gas (stimulus) won’t help.

Gas represents the government’s power to tax. Oil represents the people’s willingness to keep on working and paying taxes. When either one exceeds or falls short of its optimum level, the economy falters.

Anyone who simply advocates - as Democrats do - that increased taxes will kick-start our economy is ignoring the oil-side of the equation. Similarly, anyone who advocates cuts in spending to the exclusion of other factors is on the wrong track. The economy will not improve unless and until the equation balances.

Tea Parties tend to harp on government spending while our government is harping on ‘tax breaks for the rich‘. Neither one will ultimately succeed in bringing the economy back. It doesn’t take a mechanic to diagnose the problem in Oregon. Those who simply say “it’s the economy, stupid” are missing the point. They’re blaming both gas and oil under the umbrella of the economy not working. It takes a more nuanced approach. Clearly there’s more than enough gas. What’s missing is the oil.

Solution: Ease off on the gas and add oil. [Note to Obama: If the plan, however, is to kill the economy outright, simply to watch it burn, there are other (quicker) options. We could always run it into a bridge abutment. All options remain on the table.]

http://pkoelliker.blogspot.com/

A Great Foot-Dragging

I don’t think it’s simply a matter of (a lack of) jobs either here or in Great Britain. In countries that have essentially become prisons, in which there are essentially only two classifications of people - wardens and prisoners – there is simply not much incentive to work. Where governments routinely demand upwards of 50% of every monetary unit of sweat in return for shoddy and insufficient services, it has become far more productive to just lie low and wait for the economic climate to improve. The commonly heard complaint about high unemployment, therefore, is merely shorthand for the frustration felt by employers and employees alike who find themselves trapped by ideologically-driven policies that make little sense in the real world.

Add to this the assault we are witnessing on a daily basis on tradition and values, and many consciously (or unconsciously) decide to quit the system voluntarily. We are essentially on strike. Any time kids are sent home from school for the crime of wearing tee-shirts displaying the flag; any time terrorists are given milk and cookies while being read their Miranda rights; any time Al Sharpton opens his mouth; any time a crèche is ordered dismantled at ‘holiday’ time; any time lawmakers vote themselves a pay raise in the dead of a Friday night, we are reminded that this is no longer a country we can wholeheartedly support.

Unemployment, much more than governments’ failed effort to artificially ‘stimulate’, represents a great foot-dragging by the American and British people. Unless and until this is recognized for what it actually is, there will be no improvement in the numbers. We will continue to sit on our hands.