Banks have cut back on lending, despite all the billions of dollars that were dumped into them in the name of “stimulus.” Consumers have also cut back on spending.
For the first time, more gold is being bought as an investment to be held as a hedge against a currently non-existent inflation than is being bought by the makers of jewelry. There may not be any inflation now, but eventually that money is going to start moving, and so will the price level.
Despite a big decline in the amount of gold used to make jewelry, the demand for gold as an investment has risen so steeply as to more than make up for the reduced demand for gold jewelry, and has in fact pushed the price of gold to record high levels.
What does all this say? That people don’t know what to expect next from this administration, which seldom lets a month go by without some new anti-business laws, policies or rhetoric.
When you hire somebody in this environment, you know what you have agreed to pay them and what additional costs there may be for their health insurance or other benefits. But you have no way of knowing what additional costs the politicians in Washington are going to impose, when they are constantly coming up with new bright ideas for imposing more mandates on business.
One of the little noticed signs of what is going on has been the increase in the employment of temporary workers. Businesses have been increasingly meeting their need for labor by hiring temporary workers and working their existing employees overtime, instead of hiring new people.
Why? Because temporary workers usually don’t get health insurance or other benefits, and working existing employees overtime doesn’t add to the cost of their benefits.
There is no free lunch— and the biggest price of all is paid by people who are unemployed because politicians cannot leave the economy alone to recover, as the American economy has repeatedly recovered faster when left alone than when politicians decided that they have to “do something.”
Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University.
This is intuitively obvious to the casual observer…businesses will not expand because they are afraid of what anti-business policies (healthcare taxes/refusal to renew Bush tax cuts/skyrocketing electricity from cap and trade/takeover of GM/Chrysler) that will come from the Marxists that are now in power
Of course, we all know that the reason the stimulus hasn't worked is because it wasn't big enough … er, it wasn't properly administered … er, one of those things. It has to be, because the economic arguments supporting stimulus are impeccable.
No, no, no, you forgot the other magic words "It's Bush's fault"
God, I love reading this man's work!
Wish I had discovered him a couple of decades ago.
Sowell should be required reading starting in elementary school, so that kids get USEFUL information pumped into their brains.
I feel the same way Nick. He is very articulate and talks (or writes) so the average joe can understand….just wish more would listen and those like him (i.e. Walter Williams)
Fox News and the Republican party should make better use of the two free-market
economists Thomas Sowell and Walter Williams. These outstanding black conservatives should be on TV regularly.
Obama must have been a student of Plato. Here is Plato in the Gorgias: "The rhetorician and his rhetoric will have the same relation to all the other arts: there is no need for rhetoric to know the facts at all, for it has hit upon a means of persuasion that enables it to appear in the eyes of the ignorant, to know more than those who really know." Socrates was supposed to have said that a few hundred years B.C. The only thing we learn from history is that no-one learns anything from history.
The first rule of economics even based on supply and demand is that increasing production must come before any increase in distribution. We are not unlike the farmers who are eating their seed grain in the winter and still expecting to plant a crop in the spring with nothing.
If I were to compile a list of the five most brilliant men in America Dr. Sowell, you would be on it. I am always impressed by you intelligence and great wisdom. Maybe Mr. Obama should hold a "beer summit" with you and Walter E. Williams. It could not hurt.
Obama is following the Alinsky model: bankrupt the country, blame it on capitalism, then start a fascist socialistic regime.
Did you know, that if the 860 billion dollars was divided by 16 million people, presumably the number of unemployed, they would have each received $54,000? Instead of them collecting unemployment, we could have been paying them to do something constructive.
Oh how this house of cards crumbles…Pfizer & the other holdouts will be oh so rich when dollar, totally tanks…Invest in Gold it will be worth something, when China decides to repo this country…As the collateral, our leaders have made it…Teach your kids Mandarin with Rosetta stone…;)
What a great article, I found this to be quite an enjoyable read.
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Everything the Democrats do via 'Stimulating" is anti stimulus for the economy.
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