Five big lies about American economy

Why feel embarrassed by business? Every American benefits every day
from the phenomenal productivity of the free market, so why do so many
people feel guilty or skeptical about our business system? In this
passionately argued, eye-opening book, talk-radio star and bestselling
author Michael Medved provides detailed and devastating rebuttals to
the most widely circulated smears against capitalism.

MYTH: Big business is bad, small business is good.

TRUTH: Every big business began life as a small business, and every
small business today yearns for enough success to become a big
business tomorrow. For some products—like cars or electrical power—
little companies can’t benefit their workers or customers as reliably
as huge corporations.

MYTH: Business executives are overpaid and corrupt.

TRUTH: Top leaders will always command top dollar, and a company can’t
limit executive pay without limiting its access to talent. Ferocious,
long-term competition in the corporate world ultimately rewards focus
and hard work, not short cuts and corruption.

MYTH: You can count on better treatment from the government than from
business.

TRUTH: If a private company deals with you poorly, you can take your
business elsewhere. But with the government’s power, you get only two
choices: compliance or jail.

Medved responds to business-bashing lies with the slashing wit,
irrefutable facts, fascinating historical nuggets, illuminating
anecdotes, and liberating clarity that made him one of the top-ten
talk-radio hosts in the United States. This audacious and urgently
needed book provides energy and inspiration for a beleaguered free-
market system poised for its unstoppable comeback.

Real economies

The science of economics should start at the simplest of issues: a swap of one easy to manifacture good in exchange for another, both using freely available resources to all and no money. Under conditions of sufficient competition and new initiative, prices tend to dance around an equilibrium where all market actors about put in as much effort + skill into their products on average. If something is hard to produce, its price goes up, production for the market contracts if that means fewer buyers, and stops when there are no buyers. If something is easy to produce it makes that producer produce many making it rich, but new competition into that lucrative market drives prices down again. This all gets complicated when you add: 1 money (particularly: what is going to be the money, who will issue it). 2 resources (particularly: ownership of natural resources, such as land.) 3 managerial power (particularly: boss/serf power differences in groups.) 4 investment of money (particularly: investment into tiranical businesses.) Real economics isn't exactly very hard, it should be easy to teach it in the classroom ages 12 to 18. These people should easily be smart enough, at least the more bright 20% or so, to fully comprehend it without much trouble, as long as it is well explained using sufficient time and examples. In this failed world however, even economics at universities dares not touch real economics, which obviously would revolutionize the world beyond recognition; throw out of power the entire establishment the world over. Universities don't dare do real economics, thus they have failed in their historic mission to do science in the public interest. What is the answer to the above 4 points: do the thinking then you will know, hint 'think about power, effort & skill; imagine a med-eaval peasant, a struck down worker exploited by laissez faire capitalism 1800 by capitalist corporate barons while bankers where rich and partying.' The smartest people with enough social insight into human behavior would probably find the truth by themselves after some 6 weeks of hard thinking (?). Although maybe they wouldn't (considdering how dumb people really are); however once you know it's not hard to understand. Ok, maybe I should just say it: trades that revolve around power differences, such as one persons owns all land and others desperately need it, that is a breach of equality therefore causing the one with power to ask a much higher price not reflecting an equality in effort or skill anymore. The markets start to deviate from selling effort + skill to trading power. They retain the symbolic rituals of trade (free agreement of price), but the substance of the trades shifts from reflecting effort + skill, to the power difference. The question then becomes pro-active: how to set up the economy in such a way that it revolves around the trade of effort + skills, rather then power difference ? What do do to cancel the power-differences (as much as possible) in an economy ? Once found out, the law department should be capable of fashioning the answers with laws.

Measuring the health of the American economy

Jim Cramer (among others) says the economy is recovering.

In order to sort out the propaganda from the information, what are the
most objective metrics for determining the health of something as
complex as the American economy?

Please also explain why the chosen metrics are better than others.

The amount of time it takes the average American to secure full ownership
of a suitable retirement abode is the best measure of the health of the
economy. That one metric encapsulates the degree to which economic
development is outpacing population growth and economic rent.

It tells
us to what extent Malthus was wrong. All other measures are too
particular and subject to fraud.

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Food Stamps Now Only Source of Income for 6 Million Americans

In other economic news, the New York Times reports about six million
Americans receiving food stamps report they have no other income.
About one in fifty Americans now lives in a household with a reported
income that consists of nothing but a food stamp card.
Malthus's essay was also constructed as a specific response to
writings of William Godwin and the Marquis de Condorcet (1743-1794).

Malthus was sceptical of future improvement, considering that
throughout history a segment of every human population seemed
relegated to poverty. Malthus's explanation for this phenomenon was
that population growth generally preceded expansion of the
population's resources, in particular the primary resource of food:

"...in all societies, even those that are most vicious, the tendency
to a virtuous attachment is so strong that there is a constant effort
towards an increase of population. This constant effort as constantly
tends to subject the lower classes of the society to distress and to
prevent any great permanent amelioration of their condition.
n 1798, Thomas Malthus wrote an Essay on the Principle of Population
partly in response to Condorcet's views on the "perfectibility of
society".
Social progress is defined as a progress of society, which makes the
society better in the general view of those who attempt to cause it.
The concept of social progress was introduced in the early, 19th
century social theories, especially those of social evolutionists like
August Comte and Herbert Spencer. It was present in the
Enlightenment's philosophies of history.

Does the tide of globalization lifted all boats?

The tide of globalization automatically lifts all boats. Many
authorities have told this to us, and claim that we don't have to
worry. This statement may be true in the long run, but for now it
seems to be a fairy tale. It doesn't reflect today's reality.
Globalization nowadays is an extremely divisive force lor the American
population. The latest available data from the U.S. Census Bureau
published in August 2007 sent a very clear message: this is the first
boom period in American history where the upper classes go up while
significant parts of the middle class go downhill.

Although median household income, adjusted for inflation, has not
reached the prerecession high of 1999, income inequality is at an all-
time high. According to the U.S. Census Bureau, the share of income
going to the 5 percent of households with the highest income has never
been greater. They earned more than 50 percent of the national pretax
income in 2006. This should come as no surprise: many businesspeople
love today's globalization more than their own spouses. What they have
told us about great opportunities and win-win situations is true, but
it's true mostly for them. They are now living in the "shining city on
a hill," to which Ronald Reagan once hoped to lead the entire nation.

But a large segment of the population has become bogged down along the
way. For many Americans, their country has become a shady place down
in the valley. About 16 percent of the U.S. population, or 47 million
people, lack health insurance. Nine million people have been added to
the ranks of the uninsured during the past seven years. It is
important to know that about two-thirds of those Americans who became
uninsured last year were members of middle class households with
pretax incomes of $75,000 or more.

This phenomenon is all the more surprising when we consider that the
United States in mid-2007 was in the fifth year of an economic boom,
which raises some important questions: what has really happened in
this country? Where do these new uninsured people come from? Why have
their lives developed in this adverse direction? The answer is
disturbing: they are mostly members of the middle class working for
international companies. Their corporate leaders have cut back
employer-provided coverage over the last decade-to. improve the
competitiveness of the company. This is precisely the paradox of
globalization: while the competitiveness of American companies is on
the rise, the standard of living of the average family is shrinking.
Truth number one: globalization connects people. Truth number two: on
the same day, and in the same country, it divides society. Economic
growth and social decline are no longer mutually exclusive.

New Financial Architecture

Taxpayers will benefit most if governments put shareholder responsibility ahead of political considerations when it comes to managing their equity stakes in financial institutions. With over US$ 700 billion of taxpayers' money invested, the wrong choices – in policy objectives, management strategy, or emphasis in execution – could cost taxpayers billions of dollars and have long-term implications for the stability of the global financial architecture.The challenges facing governments managing and resolving these newly acquired equity interests in financial institutions are explored in a new working paper from the World Economic Forum in collaboration with over 150 leaders in public policy, academia, and business collaborated as part of a year-long study. Their discussions raised six key suggestions for governments:
1. Address equity stakes separately from other types of crisis intervention
2. Aim for a rapid exit whilst protecting investment value
3. Establish an independent process to manage ownership stakes
4. Restrict government influence on owned institutions to board-level issues
5. Be realistic about securing and incentivizing the best available talent
6. Raise transparency beyond public disclosure of financial performance