Tuesday, December 18, 2007

Economic Anecdote

When someone calls Vox Day an Austrian, they are referring to his economic beliefs, they're not calling him a Nazi.

There's a story there, I'd just not rather go into it.

Econ 002, Paradigm Shift, or...

...how to move from a Super Power to an exploited country without ever crossing a border.

Back when Imperial nations colonized the planet, they would exploit undeveloped and developed lands by taking their natural resources, producing goods, then selling them back. Great Britain took wool and timber from the Colonies, produced ships and textiles, and sold them back. I believe, that for a while, it was illegal to build a textile mill in the colonies so the King could maximize profits for his country.

That's how true wealth is made. You take 20 cents of raw material, wool, plastic, metal, and turn it into a $5 dollar product. Look at Japan today. I can remember 'Japanese junk' in the bubble gum machines at the A&P. The parting lines were so bad a 6 or 7 year old kid could see them and figure out how the stuff was made. That's the stuff Japan today is built on. "Jap crap!" some called it. Might have been junk, but it created wealth that flowed in from across it's borders.

China is doing the same thing, today. They've been doing it for the last decade, if not longer. Japan has a limit on it's max size. It can only get so big. China doesn't have any practical limitations on how big it can get. They're dropping the Communist Ball and Chain and life is getting better for them. They have incentive to prosper. Incentives the average American can relate to.

This post took a turn and didn't even touch the topic that I originally intended to bloviate about. Now I thinking I could go on about:
  1. How nations make wealth
  2. The economic future of the US
  3. Where China is headed
  4. How Economics is not a science with hard and universally accepted rules, but more of a study of philosophies by different schools of thought that are incompatible with each other, to differing degrees.
But I'm really weak in my understanding of econ. As a student, I disliked it because it seemed irrelevant and wrong. But that was because I thought of it as a hard science based on math and not as a philosophy where some approaches ignored history and fact and figured it was just something I didn't get and I wasn't motivated to figure it out.

While I'd like to think I'm older and wiser, the reality is I've just found a good guy who's explained enough econ to me that my understanding has gained the critical mass required for interest and pursuit. Other regular groves in my blog feeding range have offered up a choice morsel (which I just found at my local used book store at a better price than Amazon).

So now I'm of the thought that:
  1. Econ is more interesting than I thought
  2. Econ is more relevant than I thought
  3. The US is economically ailing for a number of reasons (casually related to the above)
    1. The financial system of the US has to many components of a communist system
    2. The US dollar has no stable standard
    3. The US manufacturing base has been exported
  4. China will provide significant economic competition in the years ahead
  5. Iran is waging financial war on the US (only because it can't wage military war)
  6. The Euro-Pact is to lazy and socialist to do much except compete with Boeing
Addressing Item 3, above, will allow us to deal with items 4 & 5 as well as sub-items 1-3. 1 & 2 are personal and 6 is a null item. So how do we do that as a nation? I think the solution is simple: You elect a President with a sound economic plan.

Luckily for us, Ron Paul is just such a candidate.