We've made a number of advances this week, but they are of the sort that make for difficult, if not incomprehensible reading in short sound bytes like this weekly news roundup. Such things are usually the subject of papers given before learned gatherings of academics and politicians who only appear to be listening politely in order to get a polite reception when they get up to present their views. This guarantees that the words "enthusiastic" appear with "reception" in reports of such gatherings, meaning that there was a scattering of applause and no dead cats or rotten tomatoes put in an appearance.
Nevertheless, a number of significant events have happened, highlighting the fact that, despite what the major media say, there is significant doubt growing about the plausibility of the so-called economic recovery, or the viability of what is proposed by any candidate or incumbent in the upcoming U.S. election:
• Unemployment figures are more optimistic for February, but we believe this is illusory. Not only are the statistics clearly being manipulated in order to quell public outrage, even the un-spin-doctored figures are misleading. For example, in the 1930s, the two-income family was an anomaly. Women typically stopped working for outside employers once they got married. An 8% unemployment rate today could reasonably understood in 1930s terms as 12-15%. Thus, the "unofficial" unemployment rate that has been hovering just under 20% today would be the equivalent of 30-40% in 1930s terms.
• Binary economics, "the economics of reality," is necessarily based on the natural law rights of life, liberty (freedom of association/contract) and property. In accounting and legal terms, this translates into a sort of "macro double entry bookkeeping," expressed through the accounting equation, Assets = Liabilities + Owners Equity (Contributed Capital and Retained Earnings), and the Quantity Theory of Money, M x V = P x Q. Both equations are different ways of applying Say's Law of Markets through the real bills doctrine on a theoretical basis. Capital Homesteading applies Say's Law and the real bills doctrine on a practical basis. Norman Kurland's paper, "A New Look at Prices and Money" brings theory and practice together, and eliminates the artificial distinction between micro- and macroeconomics. The current crop of candidates for office in the United States (and the world, for that matter), must seriously consider Capital Homesteading and, if they have doubts about its theoretical soundness, read Harold Moulton's The Formation of Capital (1935), (or just the Foreword to the CESJ edition) Louis Kelso and Mortimer Adler's The New Capitalists (1961), and Norman Kurland's "Prices and Money" paper.
• According to Bryan R. Lawrence in the Washington Post ("A Debt Too Rarely Mentioned," 03/02/12, A21), "The current costs of Social Security and Medicare are 14 times the government's 2011 revenue. Yet the Treasury won't recognize them in accounting." Lawrence refers to the present value of the promises being made by the government that obligate it to pay out benefits in the future, and points out that private employers must recognize these costs, whereas the government exempts itself from this requirement. We can speculate that part of the rationale may be the myth that all government has to do to retire its obligations is to print more money under the delusion that this process simply divides existing wealth into smaller and smaller bits, but this ignores the present value of future wealth. If there is little or no new capital formation, production of marketable goods and services falls, and there is less future wealth to tax to meet the obligations when they fall due. The most serious danger at that point is that the price level will begin rising faster than government prints money, igniting a hyperinflationary firestorm.
• Joe Recinos is back in town. He has located a Spanish translation that was made of The Capitalist Manifesto (1958) and will be reviewing the text for possible republication at some future date.
• If you're a little tired of all the grim economic news and you have a Kindle reader, give yourself a break by reading a couple of Universal Values Media's new and inexpensive "lite" Just Third Way fiction that can be found here.
• As of this morning, we have had visitors from 58 different countries and 49 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, Canada, the UK, India, and the Philippines. People in Venezuela, Argentina, Australia, Ireland and Poland spent the most average time on the blog. The most popular postings this past week were "Thomas Hobbes on Private Property," "Aristotle on Private Property," "The Crimes of Rick Santorum," "E. J. Dionne v. Citizens United," and "Toward a False Equality."
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.