“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Friedrich Hayek

economics_bad

The economic programs and policies currently in place are truly astounding. I don’t think I have ever seen a more harmful economic environment for the country. While some of these programs started with Bush, the Obama Administration has advanced them to insane levels. Logic, economics, common sense and history must be defied to believe a recovery is possible in this environment. The nation’s standard of living will be substantially lowered unless changes in policies are forthcoming.

To understand why this economy cannot recover under these policies, it is necessary to differentiate between the macroeconomic and microeconomic approach. Arguably, macroeconomics is not economics, but that topic cannot be fully explored today.

Macroeconomics deals with aggregates, statistics and mathematical models. Macroeconomics purports to describe and explain the behavior of the economy. But economics is not about aggregates, it is about human beings and their behavior. The building block for meaningful economics must be the individual, not some aggregate called Consumption, Investment or Government. These aggregates are nothing more than the outcomes of millions of individual decisions, summed up and categorized into classifications.

The field of economics that studies the individual is known as microeconomics. This segment of economics deals with the institutional framework and incentive structures that influence human behavior. When faced with a stable microeconomic environment, aggregate individual decisions tend to appear stable over time. Under such conditions, correlation can be found between some aggregates.

A key point to understand is aggregates do not make decisions; aggregates result from decisions. Aggregates are statistical constructs only, often useful to summarize history. However, no causal relationship exists amongst aggregates. The economy cannot be treated as if it were some giant machine. Yet, the machine analogy forms the basis for macroeconomics. If you “input” more Investment, then the “output” of the machine will increase. If you increase Government spending, it will increase GDP. If you increase the Money Supply then …… Such is the world of macroeconomics which confuses correlation with causality.

Macro advocates implicitly assume causality, an assumption that easily leads to the conclusion that an economy can be centrally managed. Macroeconomic policy “works” only in the sense that a crowing rooster “causes” the sun to rise. Macro policies provide “scientific” cover for politicians to add more power and control to their portfolio. This rationale and the fact that professing belief in macroeconomics raises the incomes of pseudo economists are probably the two primary reasons the macro myth lives on.

The Obama economic program has much to dislike even when viewed through a macroeconomic prism. Commentary amongst economists are nowhere near consensus: our deficits are too large, we are spending too much, we are not spending enough, more should go to Main Street, banks should be allowed to fail, etc. etc. Even the political allocation of funds has been criticized. Chris Dunn at the Huffington Post states:

According to the most recent data, 98 percent of all U.S. firms have less than 100 employees. These firms are responsible for 98 percent of all new jobs in America and employ 50.2 percent of the private sector workforce. American small businesses are responsible for over 97 percent of all exported goods and generate the majority of innovations that come from the United States.

Not one dollar of the $2.3 trillion in economic stimulus funds will go to the 27 million small businesses where most Americans work. One hundred percent of the stimulus bill funds not destined for states, will go to the top 1 percent of U.S. firms. The firms in that top 1 percent have not created one net new job in America since 1977.

more here:


http://www.economicnoise.com/2012/08/29/why-obamanomics-did-not-improve-the-economy/

the 'not one dollar' is a tip off that the piece is false


http://money.cnn.com/2009/02/16/smallbusiness/smallbiz_stimulus.smb/

That is not true. There are no new incentives for business starts in the Government grant or loan process. In all reality the money allocated to boost business usually goes to businesses with proven track records that either are directly invested in by Government officials or owned by family members. They like many systems can draw up lines which they can use to choose or in this case discriminate who gets the money. SB startups are stuck to the greed and usury of banks. Likewise unless you have some tangible assets they can steal from you should the business flop they will not loan you sqadoo. And how many of the 98% of small businesses that start have do do so on next to no or very little cash? Most small business starts do so on $20,000 and that is to cover fees, licensing, insurance, and their costs like Business cards, advertising, and signs. Then there are the devils called "Angels," who usually grab at 15% of a business start in perpetuity. There is a lot less growth in the Small business are to a lot of forces but one is government infringement.

MacroEconomics is a lot of contrived math used to model and explain the flow of money in an economy. it is used to attempt to predict trends and uses statistical information to give direction and to make decisions on a larger scale. Macroeconomics is a fallacy unto itself since there are variables that many businesses miss thanks to Macroeconomics that cost them dearly. For example bad advertising. Corporations use the math of macroeconomics t decide which market to approach and what their advertising in that area will do for them. Take Coke a Cola for example. They had an advertising campaign recently where their slogan Coke Adds Life was translated into Chinese came out as Coke Revives Your Dead Relatives. Needless to say the campaign was a flop and Coke a Cola missed all target sales!

Reliance on math for all things is actually pretty retarded!

Obamanomics did not improve the economny because it remains incomplete due to Congressional opposition. The President's plan, which is supported by most economists, will work well, but the House will not enact them. Everyone who knows anything about economics knows that a down economy necessitates increased government spendinging, not penny pinching.

Im not sure whats not true?

that 'not one dollar' will go to any small business?

or that it wont go, in your opinion, to any business you think it should go to?

So Why different record breaking spending not fix anything? Congress makes the budget and that is dem controlled.

Depends on what you mean by "did not fix anything." It prevented a repeat of the Great Despression. Perhaps that's nothing to you.

we dont know that it did not 'fix' anything

also probably not relevant that congress WAS dem controlled


debt, deficit,surplus, ,,,are all natural seasons of a budget

and will continue to rise some years and fall in others,,,

deficit has been declining since 2009 and we can continue to see it decline if we continue the economic plans to do so,,,

Yea Let's prove how government spending prevented a great depression. USD went down, credit rating went down. Let's hear in detail what policies prevented that. What would have been it's cause. How we know what outcomes would have happened if we didn't do that etc.

So stuff still being broke isn't a sign of not fixing something? Glad you don't work for a PC repair shop.

exactly the point

if you dont know what outcome would happen without it , you cant say it didnt 'fix' anything


thats like saying the doctor prescribing a drug didnt 'fix' anything because we dont know if things would have gotten better or worse on their own,,,

if only economics were as simple as MECHANICAL REPAIRS....

lets compare instead to momentum

something rapidly DESCENDING will continue to rapidly DESCEND, unlles

A. something happens to SLOW its descent
B. Something happens to STOP its descent (which usually follows some degree of SLOWING the descent)
C. Something happens to change the descent into an ascent (which usually follows some degree of STOPPING the descent)



we are DECLINING QUICKLY, in some areas that decline has slowed, and in some ares that decline has stopped and started to ASCEND again

Are you serious? His policies prevented to totall collpse of the backing and auto industries. Where have you been? And the credit rating went down almost entirely because of the games being played by the Republicans. The deficit didn't concern anyone until it concerned them. Go back to the Great Depression. What pulled us out of it was govenment spending, slow at first but it went into overdrive with the beginning of WW II. The US literally spent it's way to prosperity! Without that the great American middle class would have never existed. Without it now, the middle class will likely not survive.

Didn't see a single thing really answered.

Yes I can say whether or not it fixed anything. What I can't say is whether or not it prevented more problems. If I have a leaky roof and I put duct tape over the leak, Yea I stopped the leak from getting water on my floor but I didn't fix the problem.

Oh and the bank and auto bailouts were both signed by Bush in 2008. They were not Obama's policies.

the last fiscal budget of Bush administration ENDED in october 2009

as a 'fix' for the growing economic issues, a combination of actions from the Bush administration and the incumbent presidential authority of Barack Obama produced an immediate triping of the
deficit

since that time the deficit has BOTH been declining,,,

the auto industry did not bottom out
and
the banking industry did not bottom out



we added 1000 billion to the deficit at the end of 2009
but in three years we have taken back off 400 billion (or almost half)

continuing the trend would take our deficit back to PRE STIMULUS amounts within the next four years , and we could more accurately reflect upon OTHER more telling issues

like the state of unemployment, or healthcare, or education,,,etc,,,

Yes, technicaly, they were. Bush found himself between a rock and a hard place and was pretty much forced by the Democrats to support them after painting himself into a corner. You see what happens with a Republican President? Lets go all the back to Reagan, the President who first enacted trickle down economics. It didn't work then, and it won't work now.

Yes, technicaly, they were. Bush found himself between a rock and a hard place and was pretty much forced by the Democrats to support them after painting himself into a corner. You see what happens with a Republican President? Lets go all the back to Reagan, the President who first enacted trickle down economics. It didn't work then, and it won't work now.

where have you been? his trillion dollar stimulus only went to the rich folks, his backers... thats why nothing he is doing is working, because he is not for the people, but for the elites that got him voted into office...