Fire and Knowledge

“I now believe we are in for one hell of a deep downturn,” Welch told the World Business Forum in New York on Wednesday, adding that the first quarter of 2009 will likely be “brutal.”

Until recently, Welch said, he had believed the U.S. economy could avoid recession, but he has changed his mind.

“I am now caving,” he said. “Get ready for real tough times. They’re coming. There is no credit available.” (source)

Altogether, it has been estimated, the cost to the nation of complying with the full whack of federal regulations is $668 billion a year, an average of $7,000 per household. That’s a lot of compliance.

—Bill Bryson, I’m a Stranger Here Myself (Broadway Books: 1999), p. 99.

If the European Union permitted 100 percent free international trade, every worker who lost his job as a result of foreign competition could be paid $100,000 a year in compensation and the European Union countries would still come out ahead. Alternatively, the displaced workers could simply go find other jobs. Whatever losses they might encounter in the process do not begin to compare with the staggering costs of keeping them working where they are.

—Thomas Sowell, Basic Economics (3rd Edition, Basic Books, 2007), p. 480.

An international consulting firm determined that the average labor productivity in the modern sectors in India is 15 percent of labor productivity in the United States.

In other words, if you hired an average Indian worker and paid him one-fifth of what you paid an average American worker, it would cost you more to get a given amount of work done in India than in the United States. Paying 20 percent of what an American worker makes to someone who produces only 15 percent of what an American worker produces would increase your labor costs.

—Thomas Sowell, Basic Economics (3rd Edition, Basic Books, 2007), p. 446.

More Americans now declare bankruptcy each year than graduate from college.

—Richard Evans, The 5 Lessons a Millionaire Taught Me (2006), p. 6

Perhaps the most famous inflation of the twentieth century occurred in Germany during the 1920s, when 40 marks were worth one dollar in July 1920 but it took more than 4 trillion marks to be worth one dollar by November 1923. People discovered that their life’s savings were not enough to buy a pack of cigarettes.

The German government had, in effect, stolen virtually everything they owned by the simple process of keeping more than 1,700 printing presses running day and night, printing money. Some have blamed the economic chaos and bitter disillusionment of this era for setting the stage of the rise of Adolf Hitler and the Nazis.

—Thomas Sowell, Basic Economics (3rd Edition, Basic Books, 2007), p. 350.

A market economy allows accurate knowledge to be effective in influencing decision-making, even if 99 percent of the population do not have that knowledge. In politics, however, the 99 percent who do not understand can create immediate political success for elected officials and politics that will turn out in the end to be harmful to society as a whole.

—Thomas Sowell, Basic Economics (3rd Edition, Basic Books, 2007), p. 318.

What do you think — do corporate lobbies subvert democracy, or are they a necessary part of our political process and economy?

There’s a difference between a corporate lobby whose clout is based on money alone, and a group of like-minded individuals—whether they be textile workers, gun aficionados, veterans, or family farmers—coming together to promote their interests; between those who use their economic power to magnify their political far beyond what their numbers might justify, and those who are simply seeking to pool their votes to sway their representatives. The former subvert the very idea of democracy. The latter are its essence.

—Barack Obama, The Audacity of Hope (2006), p. 116