GUALFIN, ARGENTINA – First, the jobs report on Friday showed a big collapse in hiring. The official numbers showed 20,000 new jobs added in February, a far cry from the 170,000 that were expected.
Then, the Atlanta Fed said projected GDP growth for Q1 slowed to a crawl. It estimates Q1 growth will come in at just 0.2%.
And now this. The Washington Post:
Total household net worth in the fourth quarter of 2018 dropped by the largest amount since the fourth quarter of 2008 when the country was amid a steep recession, according to data released Thursday by the Federal Reserve.
Total household net worth is a measure of the assets – such as homes, stocks and bank accounts – owned by American families and nonprofits minus their debts. In the fourth quarter of 2018, it fell by about $3.7 trillion, a 3.5 percent quarterly decline. Going back to 1952, the start of the Fed’s data, only three quarters – the third and fourth quarters of 2008, and the second quarter of 1962 – posted bigger declines in household net worth, percentage-wise.
Yes, the “recovery” seems to be rolling over. But let’s wait to hear a few more notes before we “guess that tune.”
In the meantime, the mob is warming its tar and collecting its feathers. Already, almost every Democrat with his eye on the White House has come forward with a new way to punish the rich.
Tax their incomes, tax their wealth, tax their estates… even prohibit them from becoming billionaires. The latest thing, last week, was a proposal from Hawaii Senator Brian Schatz to tax their investment transactions.
Here at the Diary, we have mixed feelings about this… as we do about so many other things. On the one hand, most people would put us in the “rich” category, even though no club of the truly rich would have us…
On the other hand, the mob has a point. Much of the wealth enjoyed by the rich has come to them unfairly. It’s not the fruit of honest economic expansion; instead, the feds rigged the system.
They suppressed interest rates, dumped $4 trillion into asset markets and borrowed $13 trillion – since 2009 – to protect the rich from losses.
And on the third hand – if there were such a thing – the mob and the Democrat contenders don’t seem to care what’s really going on. They offer solutions to problems that don’t exist… and remedies that will just make the unfairness worse.
In the news over the weekend, for example, Ms. AOC was giving a speech in Texas. Bloomberg was on the story:
Democrat Alexandria Ocasio-Cortez, whose sudden rise to prominence has made her a target of Republicans and a sometime irritant to her party’s leaders, called capitalism an “irredeemable” system that is to blame for income inequality.
The 29-year-old, first-term U.S. House member from New York and self-described democratic socialist addressed an enthusiastic crowd Saturday at the South by Southwest conference in Austin, Texas, about issues that resonate with her fellow millennials, from universal healthcare to combating climate change.
Really? Is capitalism to blame for income inequality?
In a free (capitalist) system, some people will always work harder, get luckier, invest their time and money more wisely, and get richer.
The typical working stiff puts in 8 hours a day and doesn’t bother himself too much about the bigger picture. What is he doing? Why? How could he do more, work more efficiently, create a better product or service at a lower price? He doesn’t worry about it.
Some people, on the other hand, get to work at 8 a.m… and stay until 8 p.m. Even after hours, they try to figure out how to make the business more profitable… how to prevent customer complaints… how to beat the competition.
They miss their kids’ soccer games… they can’t remember their wedding anniversary… they stare dull-faced at cocktail parties, ignoring the banal pleasantries of their companions, as their brains work on business problems.
Those guys, generally, earn more money.
Is there something wrong with that? Is there a “solution” that doesn’t make things worse?
The fixes are always scams – tax, regulate, redistribute. And they’re always controlled by the elite… Returning their money to its rightful owners has never been high on their priority list.
And Ms. AOC? Has she got a better idea than all the social reformers and revolutionaries who came before her? Unlike them, is she untainted by sin, by ignorance, or by self-interest?
Should she say who earns what?
Should the heavy hand of the socialist state – instead of the invisible hand of capricious capitalism – determine what products and services are on offer… at what price… and what profit margin?
Human societies have been down that road often enough to know that they usually don’t like where they end up. We got a taste of where they end up in Thursday’s news. Household net worth dropped – the fourth biggest drop in half a century.
More to come…