The Road to Recovery

Russ Steele

I have been reading Hayek in fits and starts and have read Steven Hayward’s reports on the Power Line Blog, on how his students response to his Hayek lecture series with some interest and attention.

John Taylor has a article in the City Journal title the The Road to Recovery that you should read as an introduction to Hayek, if your are not already familiar.

As Hayek taught, freedom and the rule of law drive prosperity.

Burdened by slow growth and high unemployment—especially long-term unemployment—the American economy faces an uncertain future. We have endured a painful financial crisis and recession, the recovery from which has been nearly nonexistent. Federal debt is exploding and threatening our children and grandchildren. In my view, the reason for this predicament is clear: we have deviated from the principles of economic freedom upon which America was founded.

Few thinkers of the past century understood the importance of economic freedom better than the Austrian economist Friedrich Hayek did. As we confront our current situation, Hayek’s work has much to tell us, especially about policy rules, the rule of law, and the importance of predictability—topics that he discussed in his classic The Road to Serfdom (1944) and in greater detail in The Constitution of Liberty (1960). But his work in these areas goes beyond economics into fundamental issues of freedom and the role of government. That’s why reading Hayek is more important than ever.

You can read the full text of this important article HERE. It will be worth your time to read this article  if you are at all concerned about the economic future of this county. The article concludes:

By moving away from the basic principles of economic freedom, government policy has caused our recent economic malaise. It should be no consolation that some of our friends in Europe are facing worse economic struggles, often because they moved even further away from those principles. The good news is that a change in government policy will alleviate the problems and help restore economic prosperity. Understanding Hayek’s work, written during similar circumstances, will help us greatly as we undertake that difficult task.

I am going to redouble my effort to make Hayek part of my daily thinking and social conversation. Our only solution is to restore freedom and the rule of law in this county. We must have some certainty, we cannot live with a series of dodgy executive orders and legislation that no member of Congress had read or debated the value to the American public. We need to get back on the road to recovery.

Who Outsourced The US Space Program?

Russ Steele

Obama is making a big deal about outsourcing of American jobs.  I wonder how many Russian jobs this Obama outsourcing of the space program created?

This morning, Kazakhstan time, the next mission to the International Space Station successfully blasted off carrying the usual trio — a Russian commander, an astronaut from the international community and an American in a seat rented by NASA since the retirement of the last U.S. space shuttle a year ago this month.

The United States was once a leader in space technology, and now we have to rent a seat to the Space Station from the Russians. Obama is creating Russian jobs, while the US space industry employees are collecting in the unemployment lines.  

Obama can yammer about outsourcing, but his administration is one of the major outsourcers in America.

Bad News for Gov Brown’s Choo Choo to Nowhere – No Economic Growth

Russ Steele

Doug LaMalfa posted this link on Facebook. It fits with the research I did for a magazine article that was never published. To controversial at the time. The editor only wanted positive High-Speed Rail stories.

By Ralph Vartabedian, Los Angeles Times

A new UCLA economic analysis of Japan’s Shinkansen bullet train and its impact on the growth of cities along its route calls into question claims by state officials that California’s high-speed rail project will create up to 400,000 permanent jobs.

Construction of Japan’svaunted bullet train began in the mid-1960s, and it did not generate higher economic growth or additional jobs, according to the study.

Written by Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast, the study said there may be other justifications for bullet train service between Los Angeles and San Francisco, but the $68-billion project as an engine of economic growth “will have only a marginal impact at best.”

Nickelsburg examined the growth rates of cities and regions served by Japan’s system, compared to the nation’s overall rate of growth, and found that the introduction of high-speed passenger service had no discernible effect.

The analysis looked at nearly a dozen urban and rural prefectures and found no evidence that the introduction of bullet train service improved tax revenues, which was used as a proxy for local gross domestic product. In one case, one region without high-speed rail service grew just as quickly as a similar region with it. The study examined economic activity over a 30-year period.

You can read the rest of the story HERE. If the study’s predictions are accurate, it would undermine one of the major justifications for the California project, economic development and job creation!

China learned a very valuable lesson as the cost of their high-speed rail network doubled due to fraudulent forecasts and financial accounting tricks used to deceive the Central Committee. Not too different from what is taking place in California right now to deceive California taxpayers.

The Unions are desperate to launch this pork barrel project, but the claims of spurred economic growth have been called into question.  The lessons from Japan and China are real, and too important for our political leaders and Gov Brown to ignore. But, hey those cost overruns are down stream, long after the political hoaxers have retired and tax payers are forced to foot the bill.

It would be in our best interest, and the best interest of our children, to stop this boondoggle in November.

Been Writing About This for Years : “Green” Energy Bias Killing California

Russ Steele

I have been a follower of Joel Kotkin as an urban geographer for years, and he has new article in The Daily Beast, that has been refocused on just California by Walter Russell Mead at the American Interest Blog.

“Green” Energy Bias Killing California

California’s dysfunctional alliance between suburban greens urban machines has killed what could and should have been a boom, writes Joel Kotkin at The Daily Beast. As part of a large piece about the political danger to the Democrats that comes from fighting the transformational “brown jobs” boom, Kotkin points out that Californians are turning their backs on a bonanza.

Nowhere is the element of choice inherent in energy policy more evident than in California, home to five of the nation’s twelve largest oil fields and energy reserves equal to those of Nigeria, the world’s tenth-largest producer. As high-paying energy jobs swell payrolls in the Great Plains, the Intermountain West and parts of the Gulf, the Golden State has double-digit unemployment, a collapsed inland economy and a series of bankrupt municipalities. Amidst a great national energy boom, California’s energy production has remained stunted even as the state’s draconian “renewable” energy mandates are slated to drive up its already high electricity rates. The state’s high cost of energy has impacted industry:  despite its vast human and natural resources, the Golden State, with 12 percent of the nation’s population received barely 2 percent of the country’s manufacturing expansions last year.

Such inattention to California’s resources may be popular in wealthy precincts of Silicon Valley, San Francisco and west Los Angeles, but the state’s green approach has helped place traditionally manufacturing-oriented communities such as Oakland, east Los Angeles, San Bernardino and Stockton in deep distress. Despite central California’s vast deposits of oil and gas, unemployment rates in some oil-rich areas there are over 15 and sometimes even 20 percent.

As economic forecaster Bill Watkins recently told an audience in hard-hit Santa Maria: “If you were in Texas, you’d be rich.”

You can Read the Rest of the Article HERE.

The real questions is when will we get tired of being ruled by environmental elites and remove these folks from office and return California to the economic powerhouse it once was?