Saturday, July 17, 2010

Somewhere, John Galt Is Chuckling...

...if he can get the New York Times, that is, and saw this doozy of a headline today:

Wealthy Reduce Buying in a Blow to the Recovery

“One of the reasons that the recovery has lost momentum is that high-end consumers have become more jittery and more cautious,” said Mark Zandi, chief economist for Moody’s Analytics.

Maybe that's because the current administration is branding them as no less than traitors to the Republic for daring to be talented and intelligent, and for refusing to willingly give away their earnings? Maybe they are being cautious because they expect to need their money to fund future tax hikes that the Democrats absolutely must impose in order to fund their social welfare programs? Or perhaps they are saving it in order to safely go into hiding after the administration sets hordes of ACORN employees upon their residences and places of business in order to make sure their wealth is "shared"?

....the Top 5 percent in income earners — those households earning $210,000 or more — account for about one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts, according to an analysis of Federal Reserve data by Moody’s Analytics. That means the purchasing decisions of the rich have an outsize effect on economic data...

So as it turns out, we do need the rich after all. If they don't buy boats, the maritime industry goes out of business. If they don't buy bigger homes, the construction trade suffers. If they don't continually buy/flip cars, the automotive business fails.

And who gets hurt most? The average Joe who supports his family by working at these businesses. Once the rich stop spending, well...sorry, Joe. Maybe things will get better someday and we can expand again, or re-open. But in the meantime, here's two weeks pay. Best of luck to you and the family....

But the Left is so rigid in its ideological thinking that, like a carriage horse with blinders on, they
cannot see what is clearly in front of them:

Sam Pizzigati, associate fellow at the Institute for Policy Studies, a left-leaning research center, cautions against simply boosting the spending power of the rich through tax cuts or other measures. “Otherwise, we find ourselves in an ‘Alice in Wonderland’ world,” he said, “and the solution to the hard times that the economy is going through is to help the people that are not going through hard times.”

God forbid. How about tax cuts across the board, so all can spend freely and stimulate demand in a way that the politically-driven "stimulus" bill is utterly incapable of?

It just might work. But it is heresy to those who hold the reigns of power. And so it is off the table, for reasons having nothing to do with logic or intellect or economics. And we all suffer mightily and more so, day after day...while the New York Times asks, "Who is John Galt?"

I'd rather our economy be run by the aforementioned horse. At least it responds to a carrot and stick...

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