Economics & Finance

A Retirement Home for Old Businesses

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I started this post as a response to a comment on  Mitch Townsend’s post on the  abandoned  textile mills of  Massachusetts, but I thought the idea warranted its own space.  Arthur Kelley said:

Textiles left Mass and went to the third world. Which, at the time, was the south. The south is no longer third world. Now, and for the same reasons, textiles are leaving the south and going to yet another third world. Textiles will always be a third world industry.

That seems true at first, but looking back to founding of the mills, it obvious that textiles were not a 3rd-world industry in the early 1800s. Back in the early 1800s, textile mills were the high-tech, cutting edge business of their day.  Massachusetts  was not the 3rd world in the 1800s but instead had one of the highest standards of living in the world. People built textile mills in  Massachusetts for the same reason they built computers in California in the 1980s: It was the place to put a high-tech, cutting edge, highly profitable business.  

Industries don’t stay cutting edge and high profit forever. They have a life cycle in which they have high margins and big profits in the industry’s infancy but then decreasing margins and profits as the industry ages. Regions that have have infant  industries  can support a high tax rate, high wages and a high standard of living. Regions that have mature  industries  have to make do with low taxes, low wages and a lower standard of living.  

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When Any Excuse Will Do

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There are a few innocent  reasons why someone would think that banks should not repay TARP loans. [h/t Instapundit] Unfortunately, there is one big, sinister reason for opposing repayment: Banks that repay TARP money can refuse government controls such as forced investment and compensation caps.  

One doesn’t like to infer malice where mere  incompetence  will  suffice,  but the federal government is now completely controlled by people who hold an  ideology  that says that more political control of private enterprise is a good thing. Why shouldn’t we work from the assumption that they will use any excuse to maintain such political control?  

Suppressing Solar Power, on Environmental Grounds

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We’ve frequently discussed energy issues at this blog, so I thought people might be interested in this item.

Sen Dianne Feinstein (D-CA) has demanded that the Department of the Interior suppress plans to lease government land for solar plants in the Mohave Desert.

Also, a regional director of the Bureau of Land Management has objected to any plans for “water-cooled” solar energy projects in “the arid basins of Southern Nevada.” (He is clearly referring to solar-thermal plants: these use water to cool and condense the steam and also for cleaning the mirrors.)

There are also environmental objections to the transmission lines that need to be built in order to connect solar plants to population centers.

I expect to see a lot more of this kind of thing. As I’ve remarked before, “progressives” love alternative energy technologies as long as they remain purely theoretical. Once they become practical and ready for deployment, it becomes obvious that these technologies–like all human activities–have certain downsides. And the love is gone.

So the search for a perfect and non-existent form of energy production will continue, while our economy is seriously crippled due to electricity shortages and skyrocketing costs.

(link via Glenn)

Failure, Part 2

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It was a vital national industry, employing many thousands. The plants, although state of the art when built, were outdated. Years of poor management and outright hostile labor relations had not helped. Foreign competitors were taking market share, and US companies were belatedly moving production facilities south or offshore. Would you like to contribute your tax dollars reviving this industry?

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Arrogance

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The meldown of old-media credibility continues. Here we have a CNN reporter, covering a “tea party” event, who instead of conducting a normal interview with a participant, debates him, quite rudely (IMNSHO) and in a manner that makes it very clear where her own preferences lie. Be sure to read this unbelievable interchange and, if you have time, also watch the video.

In addition to the obvious lack of objectivity, note also the primitive quality of her arguments…”you’re eligible for a $400…” [stimulus payment, I presume she means], and “did you know that the state of Lincoln gets fifty billion dollars out of these stimulus — that’s fifty billion dollars for this state, sir!” Heck, why not make it five hundred billion and then you’ll really have an unbeatable proposition!

Note also the remarks of Representative Jan Schakowsky (D-Ill.), who blasted the “tea party” protests as “despicable” and shameful.”

“It’s despicable that right-wing Republicans would attempt to cheapen a significant, honorable moment of American history with a shameful political stunt,” she added. “Not a single American household or business will be taxed at a higher rate this year. Made to look like a grassroots uprising, this is an Obama bashing party promoted by corporate interests, as well as Republican lobbyists and politicians.”

I’ve written about Rep Schakowsky before, in conjunction with the CPSIA issue and her unbelievably obnoxious letter to an individual who has been trying to point out the problems with this badly-drafted legislation and the damage that it is doing to small businesses and to consumers. Apparently, Schakowsky is as irritated by Americans expressing their opinions on economic policy and taxation as she was by a businessperson expressing a knowledgeable opinion about regulatory policy.

I note that Schakowsky’s degree is in elementary education. Nothing wrong with that, but what in her education and/or experience gives her the confidence to believe so absolutely that her ideas about economics are so entirely correct that disagreement with them is “despicable” and “shameful”?

When talking about terrorists and other national security threats, Democrats are all about “nuance” and “shades of gray.” When talking about American citizens who disagree with them on economic matters, the shades of gray go away, and everything must be portrayed in pure primary colors.

(Schakowsky link via Neptunus Lex.)