-By Gary Krasner
Again. I posted on his missed opportunities last week. Yesterday was another one.
Romney attracted maximal media coverage for his speech at NAACP. What an opportunity to teach supply side economics to economics-challenged liberals who never vote for republicans.
Instead, he delivers a warmed over campaign speech everyone has heard him utter countless times before. Even the black audience yawned, when they weren’t booing.
I’m convinced more than ever that Romney is not only NOT a supply sider, he knows little about macro economic theory. When does he ever discuss it in any depth?
Anyway, yesterday, it was reported (see below) that San Bernardino is the 3rd city to go bankrupt. No surprise. California state workers have a deals to kill for. They won’t give it up, and cities are paying the price.
Romney may not understand supply side economics, but city mayors are finally learning the efficacy of supply-side economics theory, now that the bills are coming due. Perhaps my liberal friends will learn too.
Learn from me, that is. Not from news anchor Scott Pelley, who erroneously implied on his July 10th newscast that government pay cuts are making the economy worse!
He has it backwards, just like Obama. The same discredited, Keynesian mindset that erroneously believes government spending “stimulates” economic expansion.
That by giving paper money (“fiat” money) to cities for workers or public assistance, those recipients will supposedly create demand by spending it. Wrong.
First, the money they spend is mostly for necessities—-rent, utilities, food. That gets spent no matter what. Whether you make them work for it or give it to them as public assistance. It’s just a transfer of paper that’s decreasing in value each day.
Second, “stimulus” money is “faux money.” It’s borrowed from China or printed by the Treasury. It doesn’t represent real value.
Money must represent real wealth. And real economic expansion comes from discretionary spending. That first requires you to have discretionary income.
As I keep saying, wealth creation—-measured by profits—-is what is necessary to fund public services, and the jobs they fill.
You get wealth when person invests in a business. Or a corporation expands its operation. They produce a product or service which people want to pay for.
THAT IS WEALTH CREATION. IT PRECEDES DEMAND!!! No one wanted an iPad BEFORE it was an idea created by Steve Jobs.
But once it was created, the “demand” FOLLOWED the “supply”. The profits from the sales of that product is the real wealth I speak of. The continued success of that business, through reinvestment, through excellence in innovation and service, etc. will create real jobs.
The creation of that wealth will increase government revenue, which is based on the amount of profits the company generates and the wages those new employees earn.
That, and only that, is what finances government operations and government jobs. And that is why penalizing business and expanding government has led to the longest economic “recovery” since FDR’s rampant government “stimulus” spending (e.g. the WPA program).
Thus, after 4 years of Obama—-who is responsible for two-thirds of the national debt after just 4 yrs in office—-we have government workers who are still in the top 10% of income earners (most make 60K+) demanding more from lower income private sector workers who have far less health and retirement benefits.
Is THAT fair, Mr. Obama? On July 10th, Romney alleged that you do not understand the economy. I know you think that’s a racist statement. but it also seems to be true.