by | ARTICLES, ECONOMY, GOVERNMENT, TAXES
Signaling a slow down in the global economy is affecting U.S. manufacturers, June numbers showed production was down.
The trade group of purchasing managers said its index of manufacturing activity fell to 49.7. That’s down from 53.5 in May. And it’s the lowest reading since July 2009, a month after the Great Recession officially ended. Readings below 50 indicate contraction.
Though growth rates are already sluggish — 1.9% in January-March — the latest manufacturing numbers indicate growth is closer now to a mere annual rate of 1.5%.
Manufacturing Downturn — WSJ July2, 2012
This is not good economic news, which could worsen depending on the unemployment figures due out this week.
by | ARTICLES, BUSINESS, ECONOMY, FREEDOM
The sage Don Boudreaux share the following quote this morning on his website, Cafe Hayek:
“[S]ince profits and losses reflect the success or failure of the entrepreneur in adjusting production to consumer demand, the profits of a competitive (in the Austrian sense) industry can never be “too high” or “too low.”
Followed by his spot on commentary:
Right. To disparage profits earned in competitive markets is to disparage success at arranging for resources to serve consumers well; and to disparage unusually high profits is to disparage success at arranging for resources to serve consumers unusually well.
Put differently, to disparage unusually high profits is to imply that society is harmed whenever entrepreneurs and businesses rescue it from uses of resources that are especially wasteful compared to new, highly profitable uses.
Sadly, though, because such disparagement scores political points with many who are economically unaware – or who embrace envy as a sound justification for public policy – there’s always an abundance of politicians willing to issue such disparagements.
Not much more needs to be said. Boudreaux succinctly captures the essence of free-market enterprise and the benefits of profit to society, the individual, and businesses. To punish success, as our government seeks to do, does irreparable harm to the economy and stifles creativity, investment, growth.
