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Saturday, January 24, 2009


Economic "logic", part II

The San Jose Mercury News points out this morning in a front-page article the ultimate irony: while Obama is preparing to cut taxes and increase government spending, here in California, Gov. Schwarzenegger is preparing to increase taxes and cut spending, thereby nicely negating the entire effect of the stimulus plan.

The stimulus plan is designed to create jobs. It might, sometime in the future. Meanwhile, people are being laid off from jobs funded by the California government now. Wouldn't it be easier to have a positive effect on unemployment by stopping people from losing their jobs, rather than hoping that something else you do might create jobs sometime in the future?

And in case the magnitude of the problem hasn't hit you, here are the latest statistics, also from today's paper: The (always understated) unemployment rate in California has gone from 4.8% two years ago, to 5.9% a year ago, to 8.4% in November, to 9.3% in December. It's common whenever unemployment changes from month to month for it to change by a tenth of a percent. A change by 0.9% in one month is enormous.

A news segment I watched on BBC a couple nights ago about how the whole world is suffering had a long segment on China, and how its economy too is hurting. China's GDP increase last year? Only 8.8%. Planned economy, anyone?

TINA - There Is No Alternative...to socialism.

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