Cool rain and the dismal science

IT’S BEEN RAINING a lot recently, and that’s cooled things down nicely. Even though it’s raining, I still head downtown most afternoons to sit at a sidewalk table with a nice café americano negro and my trusty Kindle.

It’s a good way to live.

My current book, and I’m just about finished with it, is Henry Hazlitt’s Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics. It came recommended by young Ben Shapiro, a brilliant, conservative guy in spite of his not being a fan of President Trump.

Ain’t nobody perfect in this troubled world.

They don’t call economics the dismal science for no reason. Trying to get a good grip on the subject is a dismal undertaking, especially for someone like me who grapples with simple arithmetic.  But Hazlitt makes it pretty easy.

The book was first published in the late 1940s and updated in the late 1970s, but it’s quite relevant today because some things don’t change.

Hazlitt simplified things for me, and I’m going to make it even simpler for you:

A free market, unfettered by government meddling, works best 98 percent of the time. That’s the core message. But there’s more.

If government meddles in the free market, it should do this: 1. Look not at the immediate, desired effect of a policy, but at its long-term effects. 2. Look not just at the people a policy is designed to benefit, but at everyone it affects.

It’s quite common that a policy will help one group of people while doing harm to other, larger groups of people. And it’s common for a policy to right a perceived wrong today while creating greater wrongs over the long haul.

Hazlitt points out that most laymen do not take this into consideration when favoring something, and even professional economists can fail to take into account the long-term effects.

Speaking of professional economists, I cannot resist mentioning Paul Krugman’s prediction the stock market would tank if Trump became president. Of course, it did quite the opposite. One must chuckle.

On to the Irony Department, Starbucks, about as vocally leftist an outfit as you’ll find, is closing 150 stores in the United States due to minimum-wage increases and government regulations, putting scads of SJW employees out of work.

Nailed by their beloved socialism.

Minimum-wage increases is one of the things Hazlitt touches on at length as being an example of short-term vision. Government steps in to help “poor people,” but fails to realize the broader effects of a high minimum wage.

The higher salaries is money that comes from somewhere else. It is not pulled out of thin air. Starbucks sees that now. One must chuckle even more.

Hazlitt’s book is just 220 pages. I recommend it to you.

Obviously, it was not raining in the above video, which was taken a year ago, but it was raining in the video below, which was taken four years ago. Rain looks the same from one year to the next.

 

Transfer of wealth

TRANSFER OF WEALTH is the new hot term, popularized by the Left to explain why everyone is not prospering.

New ImageI am curious. Who is doing this “transfer”? Is it some individual, some cabal, who?

But it’s a great-sounding phrase that purports to explain why some people are more successful — sometimes flagrantly so — than others.

Wealthy people are rich because they stole money from the poor, or some pals “transferred” it to them.

First off, this notion is based on the false premise that a set amount of wealth exists, the “zero-sum” concept. If A gets richer, then B obviously grows poorer in the process.

This can be true. If Joe, with a NRA-approved Glock G21, pulls Moe into a dark alley and steals his wallet, then Joe has grown richer by transferring money from Moe.

But this is not how successful people get wealthy most of the time. Usually they do it because they are ambitious, intelligent, shrewd, patient, focused — and often lucky.

Poor people are usually poor because they lack one or more or all of those characteristics. Sometimes they are drunks and drug fiends too, none of which creates a good life.

Plus, do not discount just plain laziness.

(Note: I am referring to the Developed World, the traditional Land of Opportunity and Liberty. Other factors come into play in the Underdeveloped World.)

Okay, so you cannot name an individual or cabal that is doing this “transferring of wealth.” But that leaves one alternative, and it is the biggest wealth redistributor on the planet:

Government.

Democratic governments generally transfer wealth from the rich to the poor because there are more poor people, and they can vote. It is self-serving. Think Obama.

Non-democratic governments transfer wealth from the poor to the rich, which is to say the ne’er-do-wells grasping the reins of government. Think Somoza, Duvalier, Stroessner, etc.

People who decry “wealth transfer” these days ironically favor more government. They support guys like the old, wild-haired, irrational, openly socialist Bernie Sanders who wants up to a 90 percent tax rate on successful people.

Taxation is wealth transfer.

Since successful people are major job creators, taxing them into the soil is counterproductive. It slows economies and makes poor people even more poor. It is egregiously stupid.

People who support more government “transfer” of money are usually good-hearted folks. They mean well but are Utopians, out of touch with the reality of our flawed world.

If Americans are struggling financially these days — and many are — it’s due to bad government policies. It is no mysterious individual or group that’s “transferring” wealth.

So the Left actually supports “wealth transfer.” It just wants the transfer done according to its own rules. It wants to rob the successful to prop up the less-successful. It’s just “nice.”

The hard left of communism always fails (see Cuba, the Soviet Union, etc.) and the more moderate left of socialism, a softer touch, (see much of Europe) results in slogging economies.

Government can be good, but it must also be smart.

Wealth transfer belongs in the open marketplace where it’s a positive force. It’s called Capitalism.

Liberty and free markets make the best world, the best life for the most people. Sure, some will remain poor.

There’s no cure for that.

* * * *

(Note: The Left uses the term “transfer” because, to them, it is better than voicing the bald truth. Some people are far more successful at earning money than others. But this inequality of outcome doesn’t seem nice or “fair” to them.)

(Tip of the sombrero to Laurie La Gringa , who embraces “the Bern,” inspired this post.)