Trump is right on about our economy. A capitalistic system cannot exist if government is at war with business. CEOs rightly so are afraid to invest in new equipment, etc. to make our manufacturing competitive. It is no surprise that today it was announced growth in productivity was down for the 3rd straight quarter and is at an all-time low. Our workers cannot be productive with “worn out tools”. I never thought I would say this but we cannot blame even mediocre CEOs for not investing when they have to face regulators that are scaring the hell out of them. Instead they borrow at near zero interest rates and buy back stock. This will increase the value of their options and vested stock and their workers’ productivity be dammed. Democratic pundits say it is OK not to manufacture because we are a “service economy”. But what does this mean? Taken to its logical conclusion all we will be producing in the near future are more text messages and more tweets to send to each other. But no problem that all the decent paying manufacturing jobs will disappear. The Fed will just keep lending money at zero interest rates until the bubble bursts and we go over the proverbial cliff.
Icahn is correct when he warns about the oppressive government regulatory burden. He demonstrates he is clueless when he talks about the "problem" of the lack decent manufacturing jobs. It means like Trump, he doesn't understand the law of comparative advantage.
His comment on the Federal Reserve low interest rate policy is fine as far as it goes, but I doubt he understands all the chaos that the Fed creates.
-RW
That first part almost sounds like Robert Higgs' Regime Uncertainty theory: http://www.independent.org/pdf/tir/tir_01_4_higgs.pdf
ReplyDeleteI lived in Detroit from 1951 to 1953. Then I lived a mile and a half north of 8 Mile for 25 years. Then I lived in Grosse Pointe Farms a block from Detroit for 38 years. I’ve been a Rothbardian since 1973. Detroit proper suffers from:
ReplyDelete1. A lack of private discrimination and gated communities. The existing white population could not vet the new blacks moving in. The whites moved out en masse to new suburbs, facilitated by new government freeways dug as ditches through Detroit proper using eminent domain. You could now discriminate just by moving out to 21 Mile Road.
2. Government schools and compulsory attendance and taxation encouraged everyone to leave. The desirability of an area is generally based upon the quality of the schools which is really based upon the quality of the kids. Another example of how SJWs hate the poor and minorities who are compelled to attend dangerous schools.
3. Welfare and the drug war gave the new residents a way to make a living outside of bourgeois society. In the city proper, there are endless drive-byes and murders. In Grosse Pointe (two miles away from the chaos), there have been 3 murders in 40 years. One of those was the receptionist at our vet. A guy who looks like a Samuel L. Jackson character moved next door and killed her while stealing her laptop. Which he sold for $50.
4. The endless boom/bust cycle caused by the Fed plus union power totally screws up the auto industry. It’s like whiplash. And it screws up the housing market.
5. No matter how many times I explain this, Austrians are the only people who understand it.
6. Can I mention that the market does not fail and does not require “stimulus”? That private neighborhoods with enforceable anti-drug bylaws could cure the "drug problem"? Along with private streets and schools. And that the poor and minorities need these much more desperately than do wealthy suburbanites?
I would also like to point out that these beautiful homes in decay were not caused in Detroit by "free trade". They were caused by the application of generic "progressive" policies across the board.
ReplyDeletehttp://www.telegraph.co.uk/news/picturegalleries/worldnews/10191002/Detroit-in-pictures-the-urban-decay-of-Motor-City-as-it-files-for-bankruptcy.html?frame=2622271