Tom, a local, gets top billing when they post similar thoughts on the 'net.
McMahon, quoting from Harper's:
The article “Infinite Debt” by Thomas Geoghegan claims that it was the high profits available to financial firms that wrecked the U.S. economy, by diverting all of our resources (smart people, capital) from manufacturing into banking. “[Because usury laws were repealed] when banks get 25-30 percent on credit cards, and 500 or more percent on payday loans, capital flees from honest pursuits, like auto manufacturing. … The people who could have saved GM and Ford went to off to work at AIG, Merrill Lynch, or even [?] Goldman Sachs
Steyn:
Let it be said that in recent years in America, the United Kingdom, and certain other countries the “financial sector” grew too big. In The Atlantic, Simon Johnson points out that, between 1973 and 1985, it was responsible for about 16 percent of U.S. corporate profits. By this decade, it was up to 41 percent. That’s higher than healthy, but it wouldn’t have gotten anywhere near that high if government didn’t annex so much of your wealth — through everything from income tax to small-business regulation — that it’s become increasingly difficult to improve your lot by working hard, making stuff, and selling it...
...Especially given the long-term structural defects in many Western nations. A serious G20 summit would have seen France commit to the liberalization of its economy; Germany to serious natalist incentives; Britain to a reduction of the near-Soviet size of state spending in Scotland and Northern Ireland; and the United States to allowing its citizens to keep more of their hard-earned money and thus reduce both the dependency on ludicrous asset inflation as the only route to socio-economic improvement, and the risk of a Euro-style decline in birthrate caused by the unaffordability of kids.
Instead, the great powers are erecting a global regulatory regime to export their worst mistakes to the entire planet.
Steyn is a bit less optimistic than our guy McMahon, I think.
Steyn is usually right on in my opinion; but unaffordability of kids as a reason for a decline in birthrate seems suspect to me.
ReplyDeleteChronic self-obsession and a desire for comfort above all, seem more likely culprits.
Well, yah. The perception of "unaffordability" is more than the reality.
ReplyDeleteHowever, recall that the tax deduction for kids, were it cost-adjusted since 1950, would now be around $6,000.00/child.