Archive for the ‘Politics’ category

Obama’s assault on profits shows profound ignorance of basic economics

February 9, 2009

On Jan 29th Barack Obama made history yet again, this time for mouthing what is perhaps one of the most asinine statements ever spoken by a United States president:

“…there will be time for [Wall Street firms] to make profits and there will be time for them to get bonuses. Now is not that time.”

The hallmark of a recession is a decline in the average rate of profit throughout the economic system.  It is this decline in profitability which results in retrenchment and layoffs.

Keep in mind that the opposite of profits is losses.  If Barack Obama had the first clue, he would have reassured the business community that his primary goal was the restoration of profitability.  For it is precisely the restoration of profitability that offers the quickest, most efficient path back to full employment.

But Barack Obama doesn’t have the first clue.  Instead, he lashed out against business before proclaiming that profits shall be prohibited until further notice.  This is tantamount to announcing that he will be doing everything in his power to prolong the recession, if for no other reason than to assuage the contempt he feels whenever a firm announces positive earnings.


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