All italics are mine – Frank Trejo – Yesterday’s News Today
The following article was written in 1988 by Thomas Sowell – was with or is with the Hoover Institute.
Among the many sins of the economic profession, none is worse than leaving the vast majority of the public economically illiterate. Our leading universities turn out highly-trained economists, able to do some very clever and fancy things. But this is like having English departments turn our great Shakespearean scholars in a country where most people cannot read or write.
The elite of the world see to it their chosen few are sent to American universities (Harvard/Yale – the bastions of socialism – to protect and preserve the bankers economic stranglehold) to be indoctrinated and given jobs back home as heads of states or in charge of finances of the country.
Economic illiteracy is not confined to high school dropouts who hang around video arcades. It is very common among Ph.D.’s in sociology who hang around faculty clubs in the Ivy League. While it is easier to be a liberal if you are economically illiterate, political commentator George Will is living proof that impeccable conservative credentials do not give you economic literacy.
One of Will’s pet examples of the beneficial effects of government is the massive, government-subsidized water project, which has made agriculture possible in California’s fertile but dry valleys. To see the fallacy in this reasoning, take it a step further. With sufficient subsidies, you can grow bananas in Canada and sell them profitably at half the price of bananas grown in the tropics – if the taxpayers pay the staggering costs of covering the landscape with greenhouses.
At the heart of most economic illiteracy is a failure to understand the role of prices. To the uninformed, prices are just annoying obstacles that stand between them and what they want – whether for themselves of for “the public good.” But the crucial economic function of prices is to convey some underlying reality – a reality that is not going to change just because we don’t understand it.( like inflation – many public school educated think that has to do with putting air in tires)
The reality is that it costs far more to grow bananas in Canada than in the tropics, whether you measure costs in manpower and material or in the prices produced in a free market. Having the government subsidize banana growers does not change that reality. Government subsidies do not lower the cost of anything. They simply deceive the public as to how much it really costs. The supermarket collects only part of the cost of those fruits and vegetables grown out in California. The Internal Revenue Service collects the rest.
SUBSIDIES ALWAYS COST MORE
Prices do not exist just to pay for things. Everything is going to be paid for, whether under a communist system, a capitalist system or any other kind of economic system. The advantage of prices that emerge freely from competition in the marketplace is that they provide incentives to produce more efficiently – and to consume efficiently.
If bananas produced at astronomical cost in Canadian greenhouses are sold for prices which reflect those costs, many people will cut back on the numbers of bananas they eat. But if the subsidies make the prices low artificially, many more people will eat bananas whose real costs they would never agree to pay.
It doesn’t matter that the consumer is actually paying the full cost of the bananas, when taxes are added to the prices. The individual will be taxed the same, whether he eats bananas or not. When prices are conveying some underlying reality, government “control” of prices makes no more sense than government subsidy, because the underlying costs remain the same. Rent-control laws do not reduce the cost of building and maintaining housing. They simply prevent some of those costs from being paid by tenants.
When rent control makes investing in housing a bad gamble, then fewer new apartments will be built and existing apartments will get less maintenance. The net result is that there is a housing shortage immediately – and this shortage gets worse over time. The immediate housing shortage is due to people demanding more housing at a low price than they would have demanded at a higher price. This shortage gets worse because less new housing is built to replace the old housing, which wears out faster with reduced maintenance.
Rent-control laws have had this same effect, again and again, from Paris to Hong Kong to Berkeley and New York. A recent study indicated that homelessness is more common in cities with rent control. All this is a high price to pay for economic illiteracy.
True believers will say that this only shows that government itself ought to provide “affordable housing for all.” But government does not make anything cost less. It can only misstate or conceal costs by paying them in a roundabout way. Government-owned slums called “housing projects” often cost the taxpayers more than luxury housing costs in the marketplace.
The great economic advantage of prices in a free market is that they convey realities quickly, accurately and compellingly. That is also their greatest political disadvantage. People want to believe what they believe, not be forced to adjust to realities whose complexities they do not understand.
Politics offers an easy way out through subsidies and price control. It may be only an illusion, but it is an illusion that can get politicians elected. If the economic profession put more effort into providing basic economic literacy for the public, politicians could not get away with so many shell games…end of article
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The following article by the American Free Press – AFP’s SPOTLIGHT ON CONGRESS. Which appeared in its 2-08-10 issue.
SENATORS MOVE TO BLOCK AUDIT OF FED
Powerful Senators are working to undermine landmark legislation passed by the House on Dec. 11, 2009 that would give the federal government the power to audit the Federal Reserve, says Rep. Barney Frank (D-Mass), head of the House Financial Services Committee.
According to Frank, Sen. Chris Dodd (D-Conn.), who heads the Senate Banking Committee, has personally assured Sen. Judd Gregg (R-N.H.) that any audit-the-Fed language would never make it through his committee to be included in any Wall Street reform package in the Senate.
Dodd, who recently announced he will not be seeking reelection during the midterm elections next November, is currently vetting a broad Wall Street reform package in the Senate. It is unknown whether that bill contains the provision, which mandates an official audit of the privately owned and controlled U.S. central bank by the Government Accountability Office.
Gregg, who is also a member of the banking committee, has been one of the most vocal opponents of any bill in the Senate that would open the Fed up to public scrutiny. In 2009, following House passage of the audit the Fed amendment sponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), Gregg released a blunt statement, declaring: Passage of the Paul Amendment by the House Financial Services Committee is a dangerous move by this Congress to pander to the populist anger currently directed against our central bank, the Federal Reserve.”
Both Dodd and Gregg have benefited from sizeable donations from Wall Street firms. According to FEC records, in the past five years, Gregg has received over $20,000 in donations from big banks like Citigroup and Wall Street firms Goldman Sachs (one of the owners of the Fed)
The health insurance industry is the only other industry that has donated more to Gregg. Dodd has also benefited from sizeable donations from the money trust. In the past five years, Dodd has received $3.8 million from Wall Street.
On Main Street, there is a growing backlash against the Fed’s policies, which are seen as benefiting big banks and Wall Street to the detriment of working-class Americans.
The recent election of Republican Scott Brown to the Senate in Massachusetts has prompted Democrats in the Senate to take a stronger populist position in opposing international corporations and Wall Street (don’t believe it) This means legislation to audit the Fed could still be added to any reform bills making the rounds in the Senate and has as good a chance as any of ending up on Obama’s desk…end of article
How can we tell who’s right and who is wrong? Easy call folks. All you have to do is go to the source of the law – your U.S. Constitution. Its still there, all you have to do is demand elected people obey their oath of office. The privately controlled monetary policy is based on fraud. Second, how well the International Bankers protect its interest by corrupting politicians. Senator Dodd is retiring for two reasons:
There are allegations of criminal behavior – and two – people in his home state are sick and tired of this thief. Republican Gregg should also be thrown out of office, solely based upon his support of the Fed. As long as we have traitors to your Constitution the owners of the Fed will always create economic chaos and keep us in economic slavery forever. Senator Gregg – “…dangerous move…?” “…pander to populist anger…”? “Go to hell Gregg!”
Please consider subscribing to the AFP. 1-888-699-6397 – toll free.
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The following is another example what kind of info AFP furnishes not found in your morning paper:
OKLAHOMA: ILLEGAL ALIENS BETTER SCURRY…
Oklahoma’s legislature passed a law to incarcerate and ship back all illegal immigrants unless they want to get a green card and become an American citizen. And also to store DNA samples of all illegal immigrants in a database for criminal investigation. And a law that all drivers license examinations will be printed in English, and only English. And confirmed the right to bear arms and transport them in a personal vehicle. And declared Oklahoma a sovereign state, not under directives of the federal government.
President Obama, the ACLU and the federal government didn’t like it, but Oklahoma did it anyway. They also passed an amendment to place the Ten Commandments at the State Capitol entrance against federal wishes. OK?…end of article
Remember one important point – the federal government has NO JURISDICTION over illegal immigrants. They are citizens of other countries. But the ACLU and the courts will invoke the 14th Amendment as an excuse to intentionally mislead the public into believing that it includes all persons…bullshit!
Notice the increase in popularity of the 99 cent stores, the Thrifty stores, the Salvation Army stores – Day-old bread stores – throw in increasing garage sales by families to make ends meet – we are being groomed for the poor house. This is what the bankers and this rotten government are doing to the people of our country.
I tremble with fear to think that it’s possible our country will end up like many before on top of the heap of broken dreams. It’s okay, my beloved country, you can count on this high school dropout to go down swinging…I love you, America.
“I AM SORRY I HAVE ONLY ONE BAT TO SWING FOR MY COUNTRY!”
Visit my web www.trejobarrio.com It has my bio full of humor and many life stories while growing up in the greatest country in the world.
