It is baffling how, at a time when
17 million Americans have lost their jobs in a single month, businesses are in
trouble, and a few dozen other etc.s, the stock market keeps going
up! The only possible reason we can see
is that the speculators expect the massive amounts of money creation proposed
for “stimulus” to be channeled into the stock market. This is after increasing government debt to
$30 trillion. That’s right. $30 trillion . . . with no mention of how or
if it’s going to be repaid. Are there
alternatives available? Perhaps:
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| Smith: "The purpose of production is consumption" |
• Try This On Your Economy. People are worried about rebuilding the
economy after the Covid-19 pandemic, as they should be. Let’s consider the purpose of an economy,
however. Is it to bolster political
aims? No. Is it to make stock speculators rich? No. Is
it to protect some economic or political or religious theory? No.
The purpose of economic activity is to meet human wants and needs. Period.
Adam Smith built his theories of political economy on that principle: “Consumption
is the sole end and purpose of all production.”
Given that, a country’s first objective is to ensure as far as possible
that all its citizens can be productive.
In a modern economy that does not mean access to wage system jobs or
welfare, even in the form of a Universal Basic Income. It means access to ownership of the capital
that is producing the bulk of marketable goods and services today.
• Japan and China. Japan appears to be pulling back on its
economic ties to the People’s Republic of China, and putting its retrenchment
efforts into domestic projects. This
would be a good move in any event, as the domestic economy should have the
primary capacity to produce the basic needs of citizens. Exports should be products that the country
has a comparative advantage in producing.
Except as a last resort, no country should have to depend on another for
its basic needs — and that includes the United States as well as Japan.
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| Micawber Principle: don't spend more than you have. |
• Unemployment. A quick estimate is that approximately 17
million Americans have become unemployed in the last four weeks. In addition, far too many people in this
country live paycheck-to-paycheck, and even more have non-mortgage consumer debt
of more than a year’s pay — no, really. Average
non-mortgage consumer debt is approximately $38,000. The median income in the U.S. is a touch over
$63,000. Median expenditures for a
household is a little over $61,000. That
means the “typical” American is spending at least $2,000 more per year than he
or she makes. This is a recipe for
disaster. As Mr. Micawber said to David
Copperfield when articulating what has become known as “the Micawber Principle”:
“Annual income twenty pounds, annual expenditure nineteen nineteen and
six, result happiness. Annual income twenty pounds, annual expenditure twenty
pounds ought and six, result misery.” The
only refinement we can add is that the Micawber Principle assumes as a given
that the “annual income” of £20 is ongoing.
If it stops, the only difference between the prudent man who spends 6d
less than his annual income, and the spendthrift who spends 6d more, is that
disaster is only delayed a short time for the man with 6d in his purse. Property income, as opposed to labor income,
however, is more likely to continue when someone is no longer getting pay for
labor, and a capital owner should be able to hold on much longer than someone
who relies completely on labor.
• Shop online and support CESJ’s work! Did you know that by making
your purchases through the Amazon Smile
program, Amazon will make a contribution to CESJ? Here’s how: First, go to https://smile.amazon.com/. Next, sign in to your Amazon account. (If you don’t have an account with Amazon,
you can create one by clicking on the tiny little link below the “Sign in using
our secure server” button.) Once you
have signed into your account, you need to select CESJ as your charity — and
you have to be careful to do it exactly this way: in the
space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice
Arlington.” If you type anything
else, you will either get no results or more than you want to sift through. Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice
Arlington” into the space provided, hit “Select” — and you will be taken to
the Amazon shopping site, all ready to go.
• Blog Readership. We have had visitors from 38 different
countries and 45 states and provinces in the United States and Canada to this
blog over the past week. Most visitors are from the United States, India,
Argentina, Spain, and Canada. The most
popular postings this past week in descending order were “Social
Justice IV: The Characteristics of Social Justice,” “ ‘Never
Was Heresy More Subtle’,” “ ‘Contrary
to Sound Popular Feeling’,” “Was
Jesus the First Socialist?” and “How
to Stimulate an Economy.”
Those are the happenings for this
week, at least those 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.” Due to imprudent
language on the part of some commentators, we removed temptation and disabled
comments.
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