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Recovery for the One Percent

To continue my series on this, I’ve been accumulating chart links. There are so many, especially on Zero Hedge which has great coverage. I’ll make some introductory remarks, then show the charts.

As a capitalist, I have no objection to the good inequality that investors, employers and consumers award by their actions in the marketplace. The problem is inequality awarded by force or fraud. That includes crime of course; but the systemic problems in our economy today arise, sooner or later, from *government force* and fraud. Under President Obama – and our nut-job economic planners at the Federal Reserve – we have more government intervention than ever. We also have more inequality. It can’t be a coincidence.

I believe that Obama likes it on some level, because the more inequality there is, the more he can offer (still more) government intervention as the alleged “solution”. While our problems did not start with Obama, he has exploited and worsened them because inequality of power – taking ever-greater amounts of power away from the People, giving ever-more power to the Party/bureaucrats/government – is the deep tendency of the State, and as well, the deep goal of the Left.

I could talk about the explosion of welfare dependency under Obama, which rapes the “working poor” (among others) for the sake of the “lazy poor”. But my focus today is on the rape of the middle class for the so-called “One Percent”, the wealthier people who gain from our government-planned economy and government-rigged markets.

The charts show that under Obama, U.S. income inequality has increased and may be the biggest it’s ever been.

Under Obama, U.S. income inequality is the greatest it's ever been

More charts: (more…)

And This Is Why I Call Them Dramacrats

Failed VP Candidate and Emphatic Amnesty Supporter Congressman Paul Ryan released a budget blueprint today that contains some very modest entitlement reforms and mild reductions in the rate of spending growth. Not nearly enough to deal with the unsustainable spending and expansion of the Federal behemoth. Seriously, it’s like decreasing the speed of the Titanic by half a knot, or a couple with massive credit card debt and an underwater mortgage deciding to buy a Lexus instead of a Bentley.

The Democrats responded to this budget proposal the way Lindsay Lohan responds to the phrase, “Ma’am, you’ve had enough, and I think someone should take you home.”

“This reckless Republican budget casts a dark shadow over the American Dream. By gutting vital investments in our future, it is a direct attack on job creation and a recipe for our nation’s economic decline.”

Earthquakes, volcanoes, the dead rising from the grave! Human sacrifice, dogs and cats living together… mass hysteria! The Senate Majority Leader rambled incoherently about the budget creating something called a “Kochtopia.”

And, everyone knows how this Kabuki play ends. Both sides agree to spend more, and both walk away pretending they aren’t totally satisfied with the outcome.

Speaking of Drama Queens, the Diva-in-Chief of the Dramacrat Party accused people opposed to the Obamacare debacle of being “mad about the idea of folks having health insurance?

It is beyond sad that 51% of the electorate is stupid enough to believe this garbage.

Update: Oh, and a Democrat Representative in Missouri called a Republican a Nazi for introducing a bill that would let employees opt out of Union dues.

And suddenly, HFT

I never knew that Casey Kasem was the voice of Shaggy. But I digress.

CBS recently did a good piece on High Frequency Trading (HFT), a means by which well-connected computers churn the stock markets and skim the cream. 15 minutes, here it is:

But a few things are odd about HFT as a story, or at least noteworthy.

First: the curious absence of government involvement. HFT has been going on for years (Zero Hedge started blogging it in 2009). Where have the vaunted government regulators been, all this time? Answer: Nowhere (until right now, as we’ll discuss in a minute).

The CBS piece praises Brad Katsuyama, a trader who figured out years ago how HFT works and founded a new exchange, IEX, to try to defeat HFT. That’s a great example of private enterprise being ahead of the regulators.

In fact, private enterprise has run circles around the regulators; first by creating HFT, then by being years ahead of government in working to defeat HFT. Could it be that government regulation isn’t effective? (cough)

The mainstream media’s absence from the HFT story until now (2014) is also striking. And that brings us to the second oddity: the timing of the CBS story. As if by magic, within days of its airing, we have also had announcements that the FBI will finally probe HFT. And that Goldman-Sachs will back IEX, the new HFT-free exchange. (Update: And the pr0n-watching SEC finally, also, investigating.)

I’m old enough to recognize a co-ordinated campaign. Granting that HFT is a real story, I still must speculate that the reason why HFT is suddenly on our collective lips, under investigation, etc., is because somebody powerful finds it convenient, at this time. (Where in the previous five years, they didn’t find it convenient.)

Who is that somebody? I don’t know. I did just note that Goldman-Sachs is rolling with the punches, at least. Over at Zero Hedge, they speculate that HFT is now being set up as the scapegoat for a coming stock market bubble-crash. The Federal Reserve is (by its QE, ZIRP and many other policies) the biggest market-rigger of all. The Fed has engineered the stock market bubble of the last five years. And, when that bubble bursts eventually, the Fed will want us all to blame something or someone else.

UPDATE: On CNBC, Katsuyama and a (truly obnoxious) pro-HFT guy get down-n-dirty. Good times.

It’s hard to blog about Obamacare

It’s hard because there are so many items to choose from, weekly. And they’re mostly both technical and depressing (not fun to read). Obamacare is a mess of unbelievable proportions. Even now, I have 40+ related items open in browser tabs, that I had meant to get to sometime.

But here goes; I’ll try to hit a few highlights. First, President Obama’s top three Obamacare promises in 74 seconds, all lies:



The House GOP want to bless Obama’s delay of his “individual mandate” (that immorally forces people to buy insurance). Yet Obama means to resist them.

Last month, the Congressional Budget Office (CBO) found that Obamacare will weaken the economy. Along with other Obama policies, it effectively raises marginal tax rates, giving people less incentive to work. “…the CBO…reported that by 2024 the equivalent of 2.5 million Americans who were otherwise willing and able to work before ObamaCare will work less or not at all as a result of ObamaCare.” Labor unions agree that Obamacare will slam wages and work hours.

Even Dana Milbank (liberal at the Washington Post) agrees that young people are rejecting both Obamacare, and Obama. “The administration announced last week that only 1.08 million people ages 18 to 34 had signed up for Obamacare by the end of February…If the proportion doesn’t improve significantly, the result likely will be fatal for the Affordable Care Act.”

Robert Tracinski asks, What was the point of Obamacare? Because it’s not insuring the uninsured; many of them are finding Obamacare unaffordable (!) and not signing up. The Washington Post agrees.

Along those lines, Catherine Austin Fitts observes, “I don’t see Obamacare as something designed to offer healthcare…It was designed to create a framework that would allow three things. One…to use digital technology to radically reduce labor costs…Second…you wanted, as the baby boomers were aging, to…dramatically reduce the healthcare services available to them…Third…to use healthcare to really control the population…an effort to centralize power.” – Austin Fitts sees government bureaucrats as profoundly competent, once you know their real plan. What they achieve in practice (which may be bad) was very likely their real plan, as opposed to what they told the public.

Bonus article: The Greeks are finding that socialized medicine doesn’t work, once you get older and need more of it.

UPDATE: Obamacare raises family insurance costs MORE than the previous eight years, combined. Just like Obama adding more to the national debt than the previous 8 Presidents combined, I guess.

HHS Bureaucracy Completely Dysfunctional Says Former HHS Bureaucrat

Posted by V the K at 12:09 pm - March 14, 2014.
Filed under: Big Government Follies

Progressive leftists tell us that letting the Government run things optimizes efficiency because Government doesn’t have to worry about profits, and can therefore focus on providing the most efficient and effective services to people.

A former bureaucrat at the Department of Health and Human Services (HHS) tells us that this is total [link to accurate visual metaphor]. From the (popup-riddled) Daily Caller:

In a resignation letter obtained by ScienceInsider, David Wright, director of the Office of Research Integrity (ORI) — which oversees and monitors possible research misconduct — offers a scathing rebuke of the unwieldy and inefficient bureaucracy that he dealt with for the two years he served in the position.

According to Wright, activities that in his capacity as an academic administrator that took a day or two, took weeks and months in the federal government.

He recalled an instance in which he could not get approval for a $35 cost to have cassette tapes converted into CDs. He eventually was able to get them converted in 20 minutes for free by a university. And another instance in which he “urgently needed to fill a vacancy,” but was told there was secret priority list. Sixteen months later, he wrote, the position was still unfilled.

He also recounts an occasion on which the HHS bureaucracy once evaluated the efficiency of its practices; and the results were so bad they decided to do what any business would do; retool its processes to make them more efficient and get rid of the dead weight.

No, just kidding, they buried the report and vowed never to do it again.

“On another occasion I asked your deputy why you didn’t conduct an evaluation by the Op-Divs of the immediate office administrative services to try to improve them,” he wrote. ”She responded that that had been tried a few years ago and the results were so negative that no further evaluations have been conducted.”

HHS is the agency progressive leftists think should be responsible for everybody’s health care.

No wonder they think Obamacare is a rousing success.

Obama’s daily lawlessness

On Wednesday, V noted how President Obama set aside his own Obamacare law and decreed a delay to the “individual mandate”. (The mandate that he previously told the Supreme Court was an absolutely essential part of Obamacare.)

Thursday’s example was Obama’s plan to decree overtime pay for some 10 million who had willingly been working without it, because they are salaried employees.

It’s not a good thing. First of all, anytime the government mandates pay increases, it costs real people their jobs. While some people might get more pay, others’ pay goes to part-time, or to zero. When Obama proposed his minimum wage hike last month, even the Congressional Budget Office (CBO) agreed that it would cost 500,000 jobs.

But the deeper problem is that, in Barack H. Obama, we have a President who increasingly abandons constitutional, legislative and democratic processes. Throughout his administration, in issue after issue, he has declared that the rules are now different because he says so. Whether it’s ripping off honest GM bondholders, Fast and Furious, hiding information about corrupt federal prosecutors, Obamacare or countless other issues, you never can tell when this President will suddenly decide on different rules.

With this overtime change, there is serious debate about whether the President has the legal authority to do it. Some say he doesn’t; some say he does. But that means his move is dubious. And however that might be – and I say, even worse – Obama’s move makes the government interfere, once again, in arrangements that freely consenting adults had agreed on. (Liberals may want government out of the bedroom, but boy, do they want government in everything, everyone and everywhere else.)

This is one more, little thread in the tapestry of America’s decline: we have become a nation ruled by “men, not laws.” And if you think that arbitrary government doesn’t make for an atmosphere of fear and uncertainty that stifles the economy, think again.

UPDATE: Allahpundit has video, as he puts it, of Obama “in 2008 promising to roll back Bush’s executive overreach because he was a law professor and knew the Constitution ‘n stuff.”.

Rep. Trey Gowdy gives an appropriate response.

Obama, not fixing his Debt Bomb

Last week, President Obama released his new budget proposal, which in February he said would be the end of austerity. First let’s ask, what is meant by “austerity”? As a policy, was it ever tried?

As discussed by myself and others, “austerity” means tax hikes (not spending cuts) in practice. Lefties hurl the word “austerity” to demonize the idea of spending cuts. But few of the countries which left-liberals accused of cruel austerity in the last few years cut their overall government spending levels; the majority continued to increase spending. So spending cuts can’t explain those countries’ poor economic results. What can? Well, most of them raised taxes.

Clearly, we should end (or reverse) the tax hikes. That would be a great “end of austerity”. But Obama’s meaning is that we should undertake spending increases; which, for reasons touched on below, probably mean deficit increases.

Before going into Obama’s proposal, let’s review the current state of the U.S. budget. (more…)

Why Do We Need Politicians to Oppose Bigotry?

Posted by V the K at 9:34 am - March 3, 2014.
Filed under: Big Government Follies

A legitimate question:

So why do many people assume that the only remedy for anything bad—including bads that involve no physical force—is state action, which always entails the threat of violence? Are we really so powerless to deal with repulsive but nonviolent conduct unless politicians act on our behalf?

Why should we give up our power and freedom to the State in order to deal with a few isolated cases of “people doing things we don’t agree with?”

I’ll give you an answer: Because leftists get off on using state power to punish people they don’t like.

Sochi-lism

They had years to plan, and billions of dollars to spend. They knew when the project had to be finished and how many prople were counting on everything being ready for them. Instead, they delivered a typical effed up socialist debacle. Nothing works properly, and Twitter is filled with stories of the nightmarish ordeals people are going through. Yet, the regime keeps insisting that everything is great, and instead of addressing the problems, attacks critics as anti-patriotic malcontents. They claimed they had embraced capitalism, but this botched project just shows that they are still socialists, and produce typical socialist results.

But enough about Obamacare, how about those Sochi hotel accommodations?

Also, Mr. Vice President Biden was off complaining about how NYC’s LaGuardia looks all shabby and third worldy. You mean it smells bad, the government is hopelessly corrupt, and there’s an appalling gap between the wealthy elite and the poor masses? Have you never been to New York City, Mr Biden? Anyway, didn’t you guys spend very close to a Trillion dollars on “Stimulus” spending your first term? Why the heck didn’t you fix the airport then instead of shelling out half a bil to Solyndra to build defective solar panels with whistling robots?

When the Only Tool You Have Is a Hammer…

Do the Democrats ever offer any “solutions” that don’t involve bigger, badder, more intrusive and more expensive Government?

Three items from the past three days:

P.S. Gene in PA wanted me to mention Global Warming. OK, so how about the fact that Houston, New Orleans, and the Gulf Coast of the USA are under a Winter Storm Watch? Yet Obama and his Environmentalist zealots in the EPA are pushing ahead with Draconian, job-killing regulations?

Republicans Pick a Really Stupid Time to Abandon Limited Government

So, Mitch McConnell and John Boehner (and Paul Ryan) have declared War on the Tea Party because they say that people concerned about Big Government represent a crazy, ‘whackobird’ fringe and supporting fiscal restraint and limited Government will lead to electoral oblivion because Big Government is, like, uber-popular (the New York Times says so and Rachel Maddow agrees) and what Americans really want is $63Billion in new spending, a replacement for Obamacare that still puts the Government in charge of health care, more NSA surveillance, and Amnesty.

According to Gallup, however, the ‘Whackobird’ fringe is now 72% of the population. i.e. 72% of Americans say Big Government is the biggest threat the USA faces.

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That’s a big fringe.

And yet John Boehner, after his victory in blowing up the Sequester, has now turned his sights on Amnesty. Because that’s what Big Business wants. By the way, Big Business, who the Republicans are jumping into bed with, was ranked as the Biggest Threat by 21% of Americans. The GOP establishment is going against 93% of the public.

The Stupid Party, indeed.

Is Obama dumb, or just his base?

Is President Obama ignorant of how the job market works, or does he cynically exploit the ignorance of his left-wing, “low information” voter base?

If economics has two consistent findings, they are:

  1. Rent control messes up a city’s rental market, driving rents *up* (and rental quality down) over time.
  2. Raising the minimum wage kills low-end jobs, the ones held by young and/or poor people.

You can prove (2) to yourself with a simple thought-experiment. Imagine we raised the federal minimum wage from its present $7.25/hour to, say, $25. Would McDonald’s or any other restaurant, large or small, be able to stay in business?

They might, if they adopt Applebee’s new “Waiter Terminator”.

The E La Carte Presto tablets – powered by Intel – will allow patrons to pay from their seats while also adding food and beverages to their existing orders…

The Presto tablets, which were developed at MIT, have been “ruggedized” to deal with the spills and rowdy children…

DineEquity said it might consider introducing the tablets at its IHOP restaurant chain as well. The company joins many others in the industry that have begun incorporating technology into the customer experience.

When government forces wages up, it forces businesses to kill jobs: either by the business dying, or by its replacing workers with technology (a.k.a. capital). The restaurant industry has technology waiting in the wings.

As if to defy that reality, last week Obama tweeted his base the following total falsehood:

Hence, my question. (more…)

Something funny happened around 2007/8…

Median household income, DC vs. America

DC – i.e., government employees – got richer compared to the rest of America. What also happened back then was a newly-Democrat Congress adding hundreds of billions to government spending, followed of course by President Obama and his 2009 “Porkulus”.

Via Zero Hedge, who suggests that Obama should maybe keep this in mind when he gives his speeches on inequality.

UPDATE (from Dan):  Here’s something to chew on, Jeff, the difference between the governing class and Americans may be considerably greater than this graph suggests.  Bear in mind the vast differences in income in the District itself with many blighted areas in the North- and Southeast quadrants of the city.  And if incomes there would be pulling down the overall average, some folks living in Northwest (and the gentrified areas around Capitol Hill) would be earning far more than this graph suggests.

Fairness ‘frayed’? Poor people trapped? Sorry Mr. Obama, but You Are The Problem

Current Yahoo! headine, Obama: Economic fairness ‘frayed’:

President Barack Obama prodded Congress to raise wages and secure the social safety net as he issued an overarching appeal Wednesday to correct inequalities that he said make it harder for a child in the United States to escape poverty. “That should offend all of us,” he declared. “We are a better country than this.”

Obama argued that the dream of upward economic mobility is breaking down and that the growing income gap is a “defining challenge of our time.”

“The basic bargain at the heart of our economy has frayed,” the president said…

This is an example of the Left’s classic tactic, “poison as food, poison as antidote”. First the Left creates/worsens problems with their dysfunctional policies; then they position themselves (or, even more dysfunctional left-wing policies) as the supposed solution.

In this case, President Obama’s own policies create/worsen the inequality he decries. As I’ve discussed in my “Recovery for the One Percent” series here, here, here and here.

For any lefties reading this, who need the reminder:

  • Raising the minimum wage costs people jobs.
  • Big Government denies opportunity to the working poor.
  • High government spending hurts the economy and stops new businesses from being formed, as do high regulation and taxes.
  • Quantitative Easing bails out (or subsidizes) the One Percent, at the expense of the poor and middle-class.

All policies increased, maintained or advocated by Your Obama.

To be clear, the problems didn’t start with Obama; but he has worsened them.

Math arrives in Detriot

Posted by Jeff (ILoveCapitalism) at 1:47 pm - December 3, 2013.
Filed under: Big Government Follies,Liberalism Run Amok

A judge has ruled that Detroit’s bankruptcy proceedings can go forward.

The landmark ruling ends more than four months of uncertainty over the fate of the case and sets the stage for a fierce clash over how to slash an estimated $18 billion in debt and long-term liabilities that have hampered Detroit…

[Judge] Rhodes — in a surprise decision this morning — also said he’ll allow pension cuts in Detroit’s bankruptcy…

Pension cuts will likely be large. I don’t think they’ll be 84% as some have suggested, but I could see them easily being 25-50%. And it will set a precedent for other cities (and perhaps States) doing the same thing.

The point is that a pension (or Social Security, for that matter) is just a hypothetical future promise. If the money doesn’t exist to pay yours when the time comes, then it just doesn’t exist. Plan accordingly, now.

The disaster that is Obamacare (ongoing)

My earlier post may have to become a series. As before, you may know the following already from news or other blogs, but it deserves to be acknowledged here at Gay Patriot.

UPDATES (late morning):

Fellow taxpayers: we’re fools

Could be a hoax, but doesn’t sound like one:

YouTube Preview Image

…To all you workers out there preaching morality about those of us who live on welfare… can you really blame us? I get to sit around all day, visit my friends, smoke weed.. and we are still gonna get paid, on time every month…

If I was in a position where I had to work, that might be a different story…

The Soviet Union used to have a slogan, “He who does not work shall not eat”. Though aimed at the bourgeoisie, in tough times it was also applied to the lazy. In other words, the communists were tougher on non-working healthy people than we are.

Via Zero Hedge, who previously noted “the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.”

Now it’s Greek bug-chasers

UPDATE: (thanks Peter in the comments): The WHO has reversed itself on this:

“The [offending] sentence should read, ‘Half of the new HIV cases are self-injecting and out of them few are deliberately inflicting the virus’.”

“This was just a gross editing error for which the WHO apologises,” said its spokesman, Gregory Hartl.

Good for the Greeks! Now, if the other reports about bug chasers in the UK and the US have been retracted or disproved, that would also be interesting and please let us know in the comments.


As if to follow-on to my earlier post, “UK bug chasers: America’s future?”, comes this sad report from the World Health Organization, page 112:

Case study: countries’ experiences of financial crisis – Greece

Suicides rose by 17% between 2007 and 2009 and to 25% in 2010, according to unofficial 2010 data (398). The Minister of Health reported a further 40% rise in the first half of 2011…Homicide and theft rates have doubled. HIV rates and heroin use have risen significantly, with *about half of new HIV infections being self-inflicted to enable people to receive benefits of €700 per month* and faster admission on to drug-substitution programmes. Prostitution has also risen…

Emphasis added. In pursuing the cradle-to-grave Welfare State, Europe has created a society of smothering government regulation, taxes, “benefits” and controls where:

  • People can no longer get ahead, or even survive, in the private economy.
  • People can survive if they qualify for government-paid benefits.

Is it any wonder that economic crisis results? And that, in the midst of the crisis, some people will do anything to qualify for government-paid benefits?

To escape the trap, Europe must do the opposite. It must dismantle the Welfare State, creating a society of freedom where most people can’t get money from government, and can survive, or even get ahead, in the private economy.

Via New Scientist and ZH.

Venezuela: America’s future?

UPDATE: And a few days earlier, there was state-sanctioned looting:

Nov 9 – Thousands of Venezuelans lined up outside the country’s equivalent of Best Buy…President Nicolás Maduro ordered a military “occupation” of the company’s five stores…”I want a Sony plasma television for the house,” said Amanda Lisboa, 34, a business administrator, who had waited seven hours already outside one Caracas store. “It’s going to be so cheap!”

I’m shaking my head at the short-sightedness. If stores are going to be occupied and looted, then no, Amanda: TVs won’t be cheap.


I’m late getting to this, but from Reuters (via ZH):

Nov 15 – Venezuela’s socialist government has arrested more than 100 “bourgeois” businessmen in a crackdown on alleged price-gouging at hundreds of shops and companies since the weekend, President Nicolas Maduro said on Thursday.

“They are barbaric, these capitalist parasites!” Maduro thundered in the latest of his lengthy daily speeches. “We have more than 100 of the bourgeoisie behind bars at the moment.”

Inflation is the problem:

Officials say unscrupulous companies have been hiking prices of electronics and other goods more than 1,000 percent…

To spell it out for any lefties reading this: Companies only do what’s needed to stay afloat – and what the market will bear. It’s the Venezuelan currency that has been printed into oblivion. So yes, inflation.

Naturally, the government claims that its interventions help the poor: (more…)

Why QE hurts the economy

Posted by Jeff (ILoveCapitalism) at 10:02 pm - November 21, 2013.
Filed under: Big Government Follies,Depression 2.0,Economy

Most of us know the term “QE” as the central bank’s euphemism for creating lots of new money, but if you are not sure, I have an explanation here.

Recently, President Obama nominated Janet Yellen as the new Fed chairman. She is expected to continue or increase QE. At her confirmation hearing, she said:

I consider it imperative that we do what we can to promote a very strong recovery. It’s important not to remove support [QE], especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases [QE]. Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.

Yellen’s comments are tragic because QE cannot and does not promote economic recovery. It does the opposite. Why is that?

Jobs come from something called the division of labor. It’s the fact that people can produce more when they specialize intelligently. A “job” is really a package of specialized tasks that an employer needs someone to do because the specialist can do more for less (or can help the whole organization to do more, etc.).

The superior productivity of specialized labor comes, in turn, from something called capital.

  • Productive capital is the accumulation of knowledge, tools, machines, organizations and infrastructure that enables human labor to be productively specialized.
  • And financial capital is the accumulation of money (cash, shareholders’ equity, savings, etc.) that will buy or develop productive capital and direct its motions.

It is crucial to understand that not all capital is created equal. It takes work, sacrifice, talent and vision to form productive capital. Capital can be invested badly (called malinvestment, which flourishes under QE and 0% interest rates). Thus, raw investment spending levels do not matter. Financially sustainable jobs come only from the capital which has been invested well, for productive success.

QE undermines productive capital. When Obama/Bernanke/Yellen print money, they devalue money; they make it buy less than it would otherwise. So the financial capital of successful business people doesn’t go as far. QE, and 0% interest rates, also kill the return on capital: the incentive to use it very carefully (productively). Thus, QE messes up the economy’s capital, making financial capital perversely less effective for good projects and more available for bad projects, a toxic mix that injures the division of labor (the creation of economically efficient, valuable jobs). It’s as if the economy is on a narcotic and gradually getting more stupid.

The way it looks to businesses is: They thought they had some good capital, but now their capital doesn’t go as far. Everywhere they look, costs are a little higher than projected (or much higher, in the final stages of QE). Simultaneously, at 0% interest their marginal (unproductive) projects look better than those projects are. For both reasons, businesses’ capital is wasted. It somehow doesn’t go as far on their good projects – at the same time they’re tending to either idle it, or blow it on bad projects.

Businesses then need to squeeze out greater financial profits just to maintain their capital base. They do it by hiring fewer people. Some businesses seem very healthy (high-profit) after their job cutbacks. But fewer new businesses are started, and the healthy ones tend to grow by merging with (or buying out) competitors, which lowers employment. The overall economy either stops growing, or grows in unhealthy directions. The unemployed survive on government aid (which is surprisingly plentiful), while stories abound of people who ‘score’ with speculative investments, which tend to rise.

Does all that sound like the world we live in? Yes! Remember: The price of gasoline, the stock market, and the welfare/disability rolls have all roughly doubled in Obama’s reign so far. While new jobs have been far harder to come by. QE enables (at least) those disparate effects.

To be clear, QE is not the only reason Obama’s recovery has been lame. Other Obama policies also increase the cost of employing people, and other costs that businesses face. But QE doesn’t help; it adds to the economy’s burdens.

If you can think of a country that has emerged into vibrant economic recovery because of their doing large-scale QE, please post it in the comments. I haven’t been able to think of an example. And Japan, which has been doing QE since the 1990s and now faces rising costs, clearly isn’t an example. Neither will we be one.