The Dronen Report

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In an article published by Politico early this morning, Journalist Ben Smith mentioned the anger in the hearts of the anti-abortion activists.  It appears that under President Obama’s new healthcare plan, abortions must be funded by federal taxes. This meaning, if you disagree with abortions, Barack Obama insists that a portion of your taxes pay for abortions.

Several pro-life groups and organizations have proposed a simple solution: to make legislation ban abortion funding through federal taxes. Unfortunately, Planned Parenthood has joined in the debate making the claim that the ban is put in place individuals will no longer receive coverage for abortions from their health insurance.

Over the past few years, I have found myself taking note of ethics and morals more than ever before. Since I remember, life has been a matter of winning at most any expense, but I have realized the importance of accomplishing goals ethically and morally. Winning a sporting event because you cheat will not yield nearly the payoff as though you did so without cheating; it is important to be moral and upright.

The same concept is true in every aspect of life.  Do you find yourself cheating to do better on a test, lying to have your way, or even, ignoring your conscience so you can accomplish something else? We all know that it is wrong, but why do we still have the tendency to behave so poorly?

My conscience tells me that what does not belong to me should not be mine.

For example: if you have $10 and I want it, it would be wrong of me to take it from you.

The same goes for the government and your taxes. Taxation is a system of taking one man’s wealth and redistributing it to another.  This allocation of resource is once again unethical and immoral. But to understand this topic in full detail, I highly recommend my readers take my advice and read “The Law” by Frederich Bastiat, a French economist. You can read it for free by clicking on the title/link in the previous sentence. My hope it that we can come to a mutual agreement that even though “the general good” seems to be a fair concept, it is actually quite immoral.

I do feel badly for prescribing my readers more reading assignments, but as I have put it in my mission statement, the goal is clear.

Throughout the 2008 presidential election is was very clear that the Obama campaign ran under the premise of helping the middle class.  Unfortunately, it appears that he has ignored the middle class employees in the manufacturing industry.  Today, in The New York Times, Louis Uchitelle wrote an article concerning Douglas Bartlette’s manufacturing firm, Bartlette Manufacturing Company.

Bartlette recently closed down his printed circuit board factory in Cary, Illinios because the property taxes were just too high. He has laid off 87 employees and has begun to auction off his capital (machinery). Basically, he is now sitting on an empty chunk of land.

While China has been producing goods at low costs with minimal troubles entering the US market, Bartlette has not been so fortunate.  The high tariff’s in China have made it almost impossible for small manufacturing companies to sell to China.  The US has been importing many cheap products from China, but China won’t let us do the same there.

He agrued that the administration has spent so much on bailout’s for General Motors and Chystler, but his company was destined to fail.  Other manufacturing companies have been subsidized by our government. With the newly found interest in “going green”, the US has made it simple for these companies to enter the market and grow at rapid rates, but not your average manufacturing company.

It only seems unreasonable for the Obama administration to leave so many manufacturing jobs high and dry when proposed goal was to help the middle class.  The Bush administration certainly has contributed to the boost in the “green era”, but nonetheless, manufacturing is the backbone of America.  It is the sector for high school graduates seeking a decent paying job; one that can fulfil the American dream.

In response, I beckon President Obama to increase tariffs on Chinese imports so that the US manufacturing industry can survive.  With the middle class being on Obama’s docket, it only seems necessary to solve the problem.

The administration must cease the stimulus package, pay-off as much of our deficit to China and get back in the game.

This video was produced by CATO Institute’s Center for Freedom and Prosperity. Take a look and try to understand again why I feel Keynesianism is nearly guaranteed to fail.

Earlier, I was perusing the blogosphere and I came across an article I wanted to share, it is from www.charlescouger.com.

I have made the trip between Columbus, Ohio and somewhere in Michigan on about a bi-weekly basis for months now. Today, however, was a bit different. Sometime between last Thursday and today, two signs were erected that read: “Project Funded by the American Recovery and Reinvestment Act.” In the lower left it mentioned recovery.gov and something about “putting Americans to work.”

Both locations (one on US-23 north of Marion, OH and one on I-75 south of Bowling Green) were fairly deserted, with light traffic and roads in good condition (compared to the cement/gravel/asphalt mix of pot holes we call roads up in Michigan).

Perhaps more interesting is that there were no workers. In fact, there were no orange cones to even signify workers. Not even a “construction ahead” sign or a “traffic fines doubled” sign. There was nothing but a sign, signifying the Holy President Himself and His hallowed plan to reverse global financial markets by giving people shovels, jobs and bi-weekly pay.

Then I thought about it. Say the workers do show up someday, and this isn’t one big political maneuver. Why would we give them shovels? I mean, if this is all about creating jobs, then expediting the process will only put the workers at a disadvantage.

I think, in an effort to create jobs and keep workers working, we should give them all sand paper, and tell them to sand the road down.

Then, we should give them elmer’s glue and rocks, and have them rebuild the road. Seriously, if the goal is to create jobs this is perfect. It will take so many workers (such a long time) to do this.

When the people who drive on the road get irritated, the process will repeat and the government will be able to hire even more people, to fix the road made out of elmer’s glue and rocks.

The only problem with the plan (and there is only one) is that Elmer’s glue is waterproof. Now that, my friends, is a market failure. All those greedy capitalists, especially the ones from Hillsdale College… no wait… the ones that go to Church, well, they conspired and created waterproof glue, and that killed jobs.

Nevertheless, the solution is easy: create a government agency to oversee research on a new type of glue that will dissolve in the rain… so every time it rains jobs are created.

And we just created 40 million jobs.

Wow, that’s a lot to soak in, but he has a very valid point. Recently, Barack Obama activated another infamous stimulus for the State of Ohio to “produce jobs”. Columbus has used these funds to begin a disastrous project, state route 315. As many in Columbus, Ohio feel; this is an unneeded project. 315 was a perfectly functional road system and in fine conditions.

Once again, Obama is taking the Keynesian Approach proposed by my self declared, Mr.Taxhike. I discussed this wasteful economist before and will share my opinions on him again and again.

When your taxes are spent by the government just for the purpose of spending, it is a waste. Would you rather spend more money on your electric bill, your mortgage, or even invest or simply let the government through the money to people to do menial tasks like installing an unnecessary roadway?

Seriously ask yourself, how is Barack Obama using with my tax dollars?; Ohioans, ask yourselves, what is Ted Strickland doing with my tax dollars?

I apologize to the fine labourers and road crews, but in the free market system without government intervention you wouldn’t have to worry so much about losing your job, just a lower wage.

President Obama, stop re-making our roads!

As much as we all want to hear my views on the Great Depression, right now I am more concerned with sharing who John Maynard Keynes (JMK).

John Maynard Kenyes is perhaps the worst economist to walk the face of the earth.  He was negative and had poor economic suggestions.

“In the long run, we are all dead.” - John M. Keynes

Looking back on the previous discussion on GDP, we are able to understand JMK’s opinion and easily suggest evidence that his views have no substance. He made the claim that a nations measure of wealth is GDP (A poor measurement of economic welfare). Things were looking grim during Franklin D. Roosevelt’s term.  Consumer spending was down, business investment was down and so few people were employeed our net exports were in poor shape too.  Keynes recommended FDR spend government money to create jobs.  To pay citizens to create roads and build things; in other words, one man to dig a hole, and another to fill it back in.  That was JMK’s solution that created The New Deal.

Upon the first discussion with JMK, FDR disagreed with Keynes’s attempt to artificially “save” the economy, but after a bit of political pressure, FDR fell for the plan and signed onto The New Deal.  Shortly after, we experienced 1937 and ‘38.  These two years actually showed a great decline in American civilization than did the Great Depression itself.

Keynes proposed GOVERNMENT INTERVENTION, the very killer of the free-market.  The very end of you selection of name brand or generic at the grocery store.  Clearly, he was an EPIC FAIL.

Taxes hurt everyone, but the government uses your tax dollars to pay for temporary tasks to make themselves look good to the public. Do you not like driving on the nice roads my taxes have funded?  Or the same road that I funded again so the government could produce jobs for unnecessary tasks.

I propose the roads be a little less than perfect so we can have more money in our pockets to help small businesses to counteract the bad public policies taken by Obama.

Think about it please.  Does government intervention work, or is it strictly a mean of political gain?

Keep taxes down President Barack Obama; the money belongs to the hard working people that earned it.

Last summer, the Euro was pretty strong compared to the USD thanks to tactics of the Bush administration in an effort to save the US economy. While the depreciated dollar seems to be a bad thing, there is good that comes from a cheap buck as well, under monetary policy. If the dollar weakens, we will notice an increase in our exports and our trade account will improve. To put it simply, output (GDP) will rise.

Guess what,  SO WILL EMPLOYMENT!

Sadly enough, the USD is about 0.707 Euros. The dollar is becoming stronger and unemployment is now on the rise, no joke. Sure, it is obvious that unemployment is high, 9.5% as of June, according to the Beareu of Labor Statistics, but it should be lower.

With Obama in the White House, taxes are on the rise. Small businesses are being taxed left and right. These small firms must pay out more of their funds to employee benefits and in turn makes the firms less efficient, with smaller profits. Taxing entrepreneurs so highly destroys their chances of success and leads to more failures. As these firms lose money and go bankrupt, so do their employees. Everyone loses…uh oh, sounds like—-J.M.Keynes

Since the Federal Reserve is in charge of monetary policy and is not a government entity, I do not despise it quite as much as a president or government official practicing fiscal policy.  So, let it be written, fiscal policy is a waste of taxes and your hard work.  Do NOT fall for their trickery and vote for them to take your money.  Do you really think they can spend your money better than you can?  So, let it be done.

Therefore, we must rely on the Federal Reserve to regulate our money supply to keep the economy in balance.  The Fed issues bonds to increase the money supply or buys bonds back to contract it.  This is how they are able to regulate whether the dollar appreciates or depreciates, inadvertently.

Econometrician Simon Kuznets stated in his first report to the US Congress in 1934:  “…the welfare of a nation [can] scarcely be inferred from a measure of national income…”

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I am under that assumption that I must create this blog for the general public, so I will need to “dumb things down”.  Also, I will strictly provide facts regarding the measurement (GDP), so that we can have an unbiased discussion of a terribly liberal concept.

What is GDP?

GDP- the total market value of all FINAL goods, services and assets produced in a country in a given year.

What makes  up GDP?

GDP=C+I+G+NX or GDP=C+I+G+(X-M)

• C = Consumer spending
• I = Investment; more specifically, business investments
• G = Government spending; Do not that this is Fiscal Policy and funds are raised through ta
• NX (X-M) = Net exports.  Meaning the sum of the nations exports (X) minus their imports (M).

*Important Notes:

• GDP is often referred to as Y, which refers to Output or Income.
• GDP NOES NOT EQUAL GNP
• Y=C+S (consumption plus savings)

There are three forms of GDP:

• Current GDP
• Nominal GDP Growth
• and Real GDP Growth

To keep things simple, I will not embellish on GDP/GDI; this is the concept of GDP income account.
I look forward to continuing this conversation with WRIP(SA)…I hope you are just as thrilled as I am.

Til next time,

Your Monetary Policy Analyst