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Conrad Black

The phony cliff, and the real one

But, as I among many others have recounted here and everywhere, economics in a sophisticated economy like that of the United States is half Psychology 101 and half Grade 3 arithmetic. But no one, including the learned debaters last week, at this point seems to have grasped that both tests will be flunked, unless the avoidance of the fiscal cliff includes measures that radically cut the deficit and end the unspeakable fraud of 70 percent of the country’s $1 to $1.5 trillion federal deficit being covered by phony notes cyber-clicked into existence from the Treasury’s 100 percent subsidiary, the Federal Reserve. No test of psychological confidence will be passed by this charade, nor any test of Grade 3 arithmetic either. The administration swaddles itself in a few weeks of a record-breaking rise in economic-growth and tax-collection rates. But this is only three weeks, and applies to a built-in annual budget deficit of $1.5 trillion on top of an accumulated national debt that took 232 years to get to $10 trillion in 2008 and made it to $16 trillion this year. (And there are still 5 million fewer people working in the U.S. than there were four years ago.) …

No sane person can have any confidence in economic policies that perpetuate this shell game and take refuge in the worm-eaten chestnut that the economy will grow out of recession. No economy will do anything of the kind that is as over-committed as this one is to the myth of the service-industry economy, in which too few people actually add value to anything.

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(And there are still 5 million fewer people working in the U.S. than there were four years ago.) …

Doesn’t Conrad mean five million more people working? Obama said he created five million new jobs and everyone knows his word is bond. /

Kataklysmic on December 5, 2012 at 3:44 PM

No sane person can have any confidence in economic policies that perpetuate this shell game

Apparently 51% does.

John the Libertarian on December 5, 2012 at 3:47 PM

Apparently 51% does.

John the Libertarian on December 5, 2012 at 3:47 PM

He also has a great degree of confidence that most Americans can do 3rd grade math.

gwelf on December 5, 2012 at 3:58 PM

Imagine if we had allowed Capitalism to do its job instead of meddling with the economy for all these years.

DeathtotheSwiss on December 5, 2012 at 4:00 PM

But this is only three weeks, and applies to a built-in annual budget deficit of $1.5 trillion

For the duration of this pathetic Precedency the left has crowed about less than 2% “growth” in GDP while having borrowed and spent more than 8% of GDP in order to get that “growth”. It’s beyond a joke. And that doesn’t even include the 0% interest rate fake subsidy (that hides about $500 BILLION in annual interest expenses … though it will be much more when the Fed finally loses control of the debt market).

So, all told this feral government borrows and steals over 11% of GDP annually in order to claim the spectacular miracle of almost 2% GDP growth. It would be funny if it weren’t so ridiculous. And yet, they get away with it.

This American Socialist Superstate population is one of the dumbest and most pathetic to have ever walked the face of the Earth. We will be roasted in future history books, as we well should. This is insane.

ThePrimordialOrderedPair on December 5, 2012 at 4:07 PM

Hot Air left out the money quote which immediately followed:

Ten percent of the economy goes to the legal cartel and 7 percent to overages in medical costs (compared with the costs in such prosperous democracies as Australia, Canada, France, Germany, Japan, and the United Kingdom, whose health-care systems are at least as good as the American one): That’s about $2 trillion that goes to these eminent learned professions, beyond what other sophisticated and prosperous democracies spend, proportionately, on the law and medicine. And there is little sign — despite the entertaining embarrassment of some big law firms, who have to short-shrift partners to pay promised starting numbers to recent law-school recruits — of any disposition to do anything about it, or to reform entitlements or get serious about health-care reform. The fiscal-cliff question is a test of public-disgust levels at the inoperability of the political system, but if the cliff is avoided, that is far from a deliverance from the impending doom that has caused the whole world to look upon the U.S. as an economic chronic-care country.

Conrad himself leaves out Wall Street’s skim off the economy which is in proportion to the entrenched service industries he highlighted and that doesn’t even take into the account the costs associated with their failures culminating in the economic collapse. Another massive failure of our professional institutions. Somewhat surprising given his own experience in dealing with them.

lexhamfox on December 5, 2012 at 4:12 PM

Black beclowns himself a bit when he wanders into his legal and medical comments, by the way. The countries mentioned have an equivalent medical system? Hilarious! And even that obviously false assertion “hides” the gigantic portion of our “medical” bill that is in fact waste directly and solely attributable to over-regulation at the state and federal level, and of course the legal shake-down (which he mentions in the next sentence, but fails to elucidate with details). Compare the cost curves for non-insured/less regulated sub-sectors like elective cosmetic surgery, veterinary care, or the experience of a few large companies like Safeway who saw tremendous change just by instituting a handful of obvious, familiar mechanisms to tie consumers and prices back together to reintroduce cost discipline.

UK’s system is an orwellian mess (w/out even considering the huge opportunity cost, or what it might be if organized rationally), Canada’s is a pure free-rider phenomenon (medical outcomes greatly lag what they should be, and are only as good as they are because the US is close by and provides a complete safety valve for areas pathetically backwards in Canada – availability of MRIs, a growing array of cancer treatments, and on and on and on). France’s mixed system survives only because of the mix, not the public part. And all of them free-ride on our biotech and medical device private sector, in the sense that we are the engine that pulls the train.

The “legal cartel” isn’t anything of the kind, but it is a direct outcome of over-legislation and over-regulation. The required rule of law in the marketplace to enable prosperity and dynamism could be achieved with a much smaller legal sector – but even here, the political orgins of much of the problem are not “balanced” between various players or parties. Check the % of total donations to Dem organizations/candidates vs. GOP ones from the trial lawyers.

But who cares? The level of illiteracy and inability to think rationally – among “educated” Americans of the sort who think NPR and the NYT are actually serious news sources – renders all of this rather academic. The vestiges of the republic will witness an increasingly chaotic feasting by co-opted rent-seeking “private sector” industries as they attempt to temporarily shelter/gain from the expanding and suffocating state.

IceCold on December 5, 2012 at 4:44 PM

This should be filed in the folder of “Things Romney Should Have Said – 2012.”

besser tot als rot on December 5, 2012 at 4:46 PM

For the duration of this pathetic Precedency the left has crowed about less than 2% “growth” in GDP while having borrowed and spent more than 8% of GDP in order to get that “growth”.

ThePrimordialOrderedPair on December 5, 2012 at 4:07 PM

Something else that can be put in the “Things Romney Should Have Said – 2012.” Instead we got the Romney bear hug of Obama on policy (especially in debates 2 and 3), and the “I’m Not Obama” campaign.

besser tot als rot on December 5, 2012 at 4:49 PM

He also has a great degree of confidence that most Americans can do 3rd grade math.

gwelf on December 5, 2012 at 3:58 PM

We are living in Idiocracy. Debate winners are judged by who takes the most cheap shots and gets in the most “burns.” That was pretty clear in the VP debate and in debates 2 and 3. I felt like I was watching President Dwayne Elizondo Mountain Dew Herbert Camacho burn Not Sure and get the “oohs” and “aaahs.” So. Yeah, 3rd grade math is probably beyond the current scope of the electorate. But I think that if it was explained and the ramifications were explained, we could have gotten through to the marginally attached voters (who didn’t like Obama, but couldn’t find a reason to vote for Romney).

besser tot als rot on December 5, 2012 at 4:53 PM