Tuesday, March 31, 2020

How Far Left the Democrats Actually Are

It’s clear that today’s Democratic Party is very far left. But it may come as a surprise to learn that it’s further to the left than the Chinese Communist Party! Much further. For example, China has the world’s second largest number of private billionaires and is proud of that fact!

It's still strongly influenced by the legacy of Deng Xiaoping, who reportedly said, “To get rich is glorious” and “Let some people get rich first.” If these words were said in America, the Democrats would denounce them as the “trickle down” theory.

To learn what's right with capitalism and wrong with socialism, and implicitly what's right and wrong with China, first read the book at https://amzn.to/2N44uTu and then, for deeper, more comprehensive knowledge, the book at amzn.to/2PM19ut. Especially Democrats and all other leftists should do this.


Monday, March 30, 2020

Coronavirus March 30, 2020

According to worldometer (https://bit.ly/3bDD6rk), the latest US death toll from the Coronavirus is 2,938, an increase of 538 from the 2,400 I reported yesterday. As a percentage, it’s a 22% increase. Relative to US population, it’s now 9.7 per million up from 8 per million.

At a compound daily rate of increase of 22%, the cumulative total of deaths would reach 71,000 by April 15 and 1.4 million by April 30. Thus, an essential element to watch for is a change (hopefully, a sharp decline) in the daily rate of increase.

The worldometer website is updated throughout the day and thus the updates can affect the percentage change. The update used above was as of 1 PM Pacific Daylight Time (GMT-7).

Reisman has numerous works available on Amazon. See http://amazon.com/author/george-reisman

Sunday, March 29, 2020

Actual and Projected Death Rates of the Coronavirus

As of 3/29/20, the death toll in the US is 2,400; globally, it’s 34,000. As a proportion of population (300 million in US and 7 billion globally), that’s 8 per million in the US and less than 5 per million globally.

Some prominent politicians have said roughly half the population will catch the virus. If the death rate in this group were 1%, the implication would be 1.5 million US deaths. The sharply lower death rate of .1% would result in 150k US deaths.

The actual death rate and its acceleration or deceleration can easily be calculated every day and can serve as a guide to judging the worsening or tapering off of the disease. To do this, all that’s needed is the cumulative daily death tolls, which are widely reported.

For Reisman’s works available on Amazon, see http://amazon.com/author/george-reisman

Monday, March 23, 2020

A Soviet-Style Economy in America?

America may be headed toward a Soviet-style economy, with permanent pervasive shortages and waiting lines.

This is because Congress and the media believe that massive money creation can offset the massive reductions in production and supply caused by government prohibitions on working.

(The government’s alleged relief and bailout programs all boil down to just one thing: create new and additional money and dump it into the economic system. Even send it to people directly in the mail, in the form of government checks.)

The truth is that increases in money and spending combined with reductions in supply are a double-barreled blast that works to drive prices up. But the rise in prices is already prohibited by anti-“gouging” laws, to which overt, comprehensive price controls may well be added.

The combination of price controls, more demand, and less supply means shortages everywhere that spending strives to increase in the face of less production and supply. In the best-case outcome, i.e., if price controls are removed, or not imposed, it means a surge in prices.

A surge in prices, of course, would mean yet a further decline in the value of accumulated savings on top of the plunge in the stock market and which may be further worsened by a plunge in the bond market.

When one takes account of the consequences of the government’s efforts to combat the Coronavirus, it looks increasingly like the government’s action has served to make a bad situation even worse.

Visit Reisman’s Amazon.com’s author’s page at http://amazon.com/author/george-reisman

Thursday, March 19, 2020

China’s Alleged Overcoming of the Coronavirus

According to the NYT (https://nyti.ms/3bgDFHH), there are no new Coronavirus cases in China except for those brought in from the outside. This is a claim not just about Wuhan but the whole country.

This claim implies that it took no significant time whatever for the disease to spread from Wuhan throughout the rest of China and that now all of China can be assumed to be essentially free of the disease. (There isn’t enough salt to take this with.)

A hypothesis worth considering is that China is desperate for foreign exchange earnings and is getting ready to order its population back to work at risk of being infected or not.

A second hypothesis worth considering is that the Chinese have found that, outside of particular identifiable segments of the population, the death rate from the Coronavirus is much lower than initially believed, perhaps comparable to that of the flu.

P. S. If you don’t like the empty store shelves, wait ‘til you try socialism. Under socialism, empty shelves are so common that it’s such an event when a store has something worth buying that a line immediately begins to form without people even knowing what it is that’s available.

Sunday, March 15, 2020

Anti-“Price-Gouging” and the Preference for Suffering Over Profit

The New York Times reports that many hospitals are now rationing hand sanitizer and “crucial respirator masks” while at the same time large quantities of these very items are in the hands of speculators who are prohibited from selling them. (https://nyti.ms/2QwyD1R)

“He has 17,700 Bottles of Hand Sanitizer and Nowhere to Sell Them,” reads the Times’ headline. Thus, people are in desperate need and those who could alleviate their needs are prohibited from doing so.

They are prohibited by a combination of anti-"price gouging” laws, ignorance of economics, and, it appears, a preference for the suffering of the innocent over the profit of those who could supply them.

There is no reason for a shortage of anything if its price is allowed to rise to the point of reducing the quantity demanded to the supply available.

There is no shortage even of gold or diamonds. That is because their price is high enough to limit the quantity of them demanded to the supplies available.

There is certainly no good reason for a shortage of hand sanitizer, respirator masks, bottled water, toilet paper, or anything else. A sufficient rise in price would counter the effect of the sudden increase in the need for these items created by the fear of the Coronavirus.

The rise in price would also serve to increase production, and do so the more rapidly, the greater the rise. For example, a sufficient rise would provide an incentive for round-the-clock production and cover whatever increase in cost of production might take place.

The threat of the Coronavirus has created an urgent new and additional need for such things as hand sanitizer and respirator masks, particularly on the part of the elderly, who are at the greatest risk.

The elderly need to be able to outbid younger people, whose need is less urgent. In a free market, the greater urgency of their need would enable them to outbid younger people even of considerably greater wealth and income, but with a much less urgent need.

This outbidding would not be confined to such things as respirator masks directly, but rather extend to alternative products of the same factors of production as required to make respirator masks.

Thus, the elderly would gain respirator masks, and to make that possible, younger people would somewhat reduce their consumption of other goods that required the same factors of production as required to make respirator masks.

Prices are a reflection of the changing relationships between needs and wants and external facts. When these change, prices must be allowed to change so that the buying and selling decisions of people can change accordingly.

Price controls of any kind prevent people from adjusting their behavior to the changes confronting them. They paralyze people and leave them standing helpless in the face of change.

They are the kind of response one would expect from someone who has made himself deaf, dumb, and blind, utterly oblivious to the changes going on around him.

There is one set of prices appropriate to conditions in which there is no threat of the Coronavirus and another set of prices appropriate to conditions in which there is the threat of the Coronavirus.

It’s insane to ignore the difference and pretend that nothing has changed and thus that prices must not significantly change.

Recognize the difference, allow prices to reflect reality, and such things as the shortages of hand sanitizer and respirator masks faced by hospitals will immediately disappear. For the hospitals are in a position to outbid virtually all other competitors for such things.

For one thing, they could immediately obtain the supplies held by speculators, who, under present conditions, are prohibited from selling them, a situation that is insane.

What is preventing these sales is an apparent preference for the suffering of hospital patients over the profit of the speculators, who have assembled the supplies the hospitals and their patients need.

Ironically, forcibly keeping speculators’ supplies off the market, serves to further increase the price of whatever speculators' supplies do manage to reach the market, because the market’s supply is correspondingly reduced.

The pathological hatred of speculators’ profits and their forcible prevention through threats of fines and jail terms is a cause of hoarding over and above the need to prepare for staying at home to avoid catching the Coronavirus.

If there were no price controls or threat thereof, prices in the present situation would be high enough to keep stocks on the shelves. Thus, people would know that while they might have to pay a very high price for it, what they wanted would at least be available.

They would not have to stockpile against the threat of vital supplies simply not being there when they needed them and thus of taking every opportunity to snatch up supplies whenever they appeared.

(For a critique of all aspects of price controls, see my The Government Against the Economy, available at https://amzn.to/2TSrMS4)
The Government Against the Economy

Wednesday, March 04, 2020

Capital Must Not Be Meat for Socialism’s Ravenous Wild Dogs

Under capitalism, one man may own a string of automobile factories, and one man may own a string of oil fields, pipelines, and refineries. From their wealth comes tens of millions of automobiles and the fuel to power them and to heat the houses of the millions.

Socialists—as immense in their ignorance as they are small in their minds—resent the wealth of those who sustain them and provide them with a civilized existence. They want that wealth for themselves, in the delusion that their consuming it would make their lives easier.

Intellectually, socialists are still in the Dark Ages, when the only use of wealth was in the frame of one’s own consumption. They have never learned that under capitalism, wealth is used in the production of goods for the market and in the purchase of others’ labor to help.

Socialists do not know that the wealth so used, i.e., capital, is the foundation of the supply of products and the demand for labor and thus of the standard of living of everyone, and that the greater the capital, the greater is the wealth and well-being of all.

Socialists, in their small-minded ignorance and envy, call this fact “the trickle-down theory.” Their theory, in contrast, is the loot-and-plunder theory, a theory fit for ravenous wild dogs.  

As I wrote yesterday, socialism is not an economic system. It is merely the negation of capitalism, leaving in its wake chaos, famine, and death.

For more, read the writings of Mises, Rand, and Reisman.

Sunday, March 01, 2020

The Environmentalist Left’s Remarkable New Principle

If we destroy the energy base needed to produce and operate the construction equipment required to build strong, well-made, comfortable houses for billions, we shall be safer from bad weather, environmentalism alleges, than if we retain and enlarge that energy base.

If we destroy our ability to produce and operate refrigerators and air conditioners, we shall be better protected from hot weather than if we retain and enlarge that ability, environmentalism claims.

If we destroy our ability to produce and operate tractors and harvesters, to can and freeze food, to build and operate hospitals and produce medicines, we shall secure our food supply and our health better than if we retain and enlarge that ability, environmentalism asserts.

There is actually a remarkable new principle implied here, concerning how man can cope with his environment. Instead of our taking action upon nature, as we have always believed we must do, we shall henceforth control the forces of nature more to our advantage by means of our inaction.

Indeed, if we do not act, no significant threatening forces of nature will arise! The threatening forces of nature are not the product of nature, but of us! Thus, speaks the environmental movement.

(The above passages are adapted from p. 88 of the author’s Capitalism: A Treatise on Economics, now available in hardcover, paperback, and Kindle editions at https://www.amazon.com/-/e/B001KCWY0Q.)